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Walgreen Co. Message Board

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  • robbsbeach robbsbeach Jul 23, 2010 11:42 AM Flag

    30$ today

    Dilution of earning is the key factor going into 4th quarter.

    1) CCR cost trended upward and were estimated at 55 the higher end of original range, with more store going into conversion.

    2) D/R costs backend and a higher cost estimate from completing D/R remodeling
    is more likely to occur.

    3) SG&A costs higher percentage of sales in the slower summer months of healthcare drug spending.

    4) Share buy-back that was announced and a special dividend was paid out, also continuing the buy-back plan up to the 2 billion.
    I think we are seeing this now.

    5) Marginal pressure on generic prices until the last half of 2011.
    (see Medco announcement)(CVS dispute)

    6) Inventory cost increases for drugs going into 2011.

    7) New store opening cost/Organic growth.

    These are the Head winds on Net earning going into the 4th quarter, so earning may increase but these factors will be present.

    The end of the second half of 2011 is where projections are focused.

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    • wall of worry! head winds I agree but this stock will go higher based on the back half of 2011 at which time we will be hitting 52 week highs.
      ccr costs are between 45 and 55k, will differ by store, look for more around 50k
      There was no special dividend and the share buyback is not enough to influence a stock that can trade up to 25 million shares on any given day. Also share buybacks only ad to eps helping to offset DR charges. We will see less charges from rewire & power but bigger benefits to the bottom line from those programs.

 
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