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Walgreen Co. Message Board

  • zippy1015 zippy1015 Jan 25, 1999 2:50 PM Flag

    DUMP (Pardon me, I mean DEMP)

    There's
    a good reason for that. The company is/has been in
    the crapper for a long time. Rudderless, listless, no
    strategy means no/lousy profits, underperforming stock and
    stockholders heading for the exits (rightfully so, I might
    add)

    <<<Stock is still very cheap
    fundmentally and could be in beginning stages of a good move
    up.>>

    I doubt that. Don't hold your breath waiting for
    the big move up. I still recommend changing the
    ticker symbol to DUMP. It's overdue.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • <<Imitrex sale on insurance may give you
      $1.00-$1.50 return on investment or perhaps 1-2% return
      ---low margin. >>

      I must beg to differ.
      Most (WAG) pharmacies run between a 20% and 32% gross
      profit margin. Therefore, our theoretical $100 Imitrex
      purchase yields, say, $25 gross profit. After salary and
      rent, it comes to about $10 profit. And as WAG grows
      and grows, the HQ expense gets spread over more
      stores and take a much smaller bite out of the
      GP.

      Yes, the third-party plans have reduced the pharmacy
      GP, but WAG is doing a better job than anybody in
      stopping that slide in profit. Also, WAG is doing a better
      job than anybody in filling more prescriptions with
      less payroll, using technological advancements to make
      the process more efficient.

    • The drive-thru is for RX pick-up and drop off not
      merchandising. As a convenience you have to expect loss of sales
      from front end in exchange for making new customers
      and keeping existing patients.Imitrex sale on
      insurance may give you $1.00-$1.50 return on investment or
      perhaps 1-2% return ---low margin.

    • <<They need SHOPPERS not drive- buy
      shooters. Marketers know this, cut back on store help since
      they don't have the traffic. This makes the buying
      experience a bad one for many of the foot trafficers.
      >>

      I don't know about other retailers, but this is
      definitely NOT the case at WAG. In fact, WAG has increased
      it's front-end staff by guaranteeing that someone will
      always be in the photo lab. This was made cost-effective
      by installing the one-hour photo developing in
      virtually all stores. This displays the intelligence of WAG
      upper management: increasing the staffing/customer
      service levels and making it profitable by giving them
      something else to sell.

    • << Either way he ""BUYS"" the product you
      are selling. Burger joints, banks, etc don't lose a
      sale because of drive-thru's. You deposit your money;
      you pay your lones. How? Walk in, drive thru or mail.
      That's how the convienience factor works for that
      retail. Drug stores, WAWA shops, 7-11's need FOOT
      TRAFFIC. They need SHOPPERS not drive- buy
      shooters>>

      While you make a good point that the product McD/BK are
      selling is the one sold at the d/t, you are discounting
      the huge difference in the average ring between fast
      food and pharmacy. I imagine the average sale at ff
      d/t is ~$4.50. At a pharmacy window, when you include
      the third-party billing, your average sale is around
      $40 or $50. Think of the woman on her way home after
      a tough day who needs to pick up her presription
      for Imitrex to fight the migraine she thinks she
      might get; that's a $100 sale at the d/t. You've got to
      sell a lot of burgers to equal that. So if you can add
      some prescription business to the pharmacy because of
      your convenient d/t window, it can more than make up
      for missing a few candy bar sales on the front end.

    • Purchase strategy with regard to the split date
      is interesting. I am currently considering WAG, but
      have decided to wait until the split for the price to
      settle a bit. When is the split date?

      Thank You.

    • I'm not sure where the info. of profit margins in
      the 100s came
      from? I'm hoping you're not serious.
      Don't confuse high margins
      by manufacturers with
      providers like WAG. WAG is probably closer
      to the nat'l
      gross margins for pharmacies that range from
      about
      26-30%. Also, Rx dept. only makes up 50% of the average
      WAG
      store revenue...store traffic will always be
      important...just like real interaction with the patient/customer.

    • The margins on the drugs that WAG sells is so
      good, they don't need them to come in and buy lost
      leaders to drop their profit margins. They make their own
      drugs!!!!! Profit margins are in the hundred fold!!!!!

    • yes, but what does that do for the front end
      sales that are an important part of all retail? Won't
      do the hurried customer any good when the stores
      have to close/consolidate due to lack of revenue. The
      liability factor is also a big part. That customer with
      less time, in a hurry to get in and get out is the
      very one that'll fail to be cautious going thru these
      windows. Remember, the McD/Burgerking customer is getting
      a burger. He either wants to sit and eat or drive
      and eat. Either way he ""BUYS"" the product you are
      selling. Burger joints, banks, etc don't lose a sale
      because of drive-thru's. You deposit your money; you pay
      your lones. How? Walk in, drive thru or mail. That's
      how the convienience factor works for that retail.
      Drug stores, WAWA shops, 7-11's need FOOT TRAFFIC.
      They need SHOPPERS not drive- buy shooters. Marketers
      know this, cut back on store help since they don't
      have the traffic. This makes the buying experience a
      bad one for many of the foot trafficers. End
      result??lost buisness. School's still out but I believe, along
      with many others in retail, it's a bad, bad idea for
      drug stores!!! IMHO

    • I've glanced at the dell board, but haven't gone
      back to far on it yet. But I got the value line sheet
      at the library and am going to look at some of the
      numbers. One nice thing about WAG is you can use the WAG
      annual report as a benchmark for other company reports.
      Makes fundamental analysis easier. BTW, I'm writing
      this on a DELL (my second one). Always been satisfied
      with their products and service.

      metogoshe

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WAG
61.55+1.35(+2.24%)Oct 21 4:01 PMEDT

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