Drugstores and Walgreen’s profit shortfall

Posted By on December 22, 2008

The drugstore sector stumbles at the market open on Monday after Walgreen’s (WAG)  announced that their profit fell 10 percent in its fiscal first quarter. Traders responded with selling shares even after acknowledging the shortfall was due to  “the costs opening more than 200 new store.”  The company answered the loss with a plan to slow the opening of new stores in order to save $500 million during the recession.

drugstore sector
Walgreen, Rite Aid and CVS after Monday’s Market Open

CNBC hosts talked JPMorgan healthcare analyst Lisa Gill Monday as the market opened and she offered opinion on  drugstore and associated pharmacy sector.

Cost saving in this sector favors manage care  companies like pharmacy benefit manager Medco, Express Scripts and CVS, which control most of the mail order pharmacy business in the U.S.  The 90-day mail prescription rather than 30-day drugstore prescriptions along with automation continues to be the most efficient way to cut cost for customers and their healthcare insurance companies.

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Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.