Walgreen Co WAG.N, a drugstore chain operator in the United States, reported a quarterly profit that is much better than what it anticipated. The strong quarterly profit is said to be primarily caused by strong prescription sales that makes its shares to rise by 3.6 percent. Aside from the number of prescriptions penetrated, the cost savings, which resulted from the company’s acquisition of Alliance Boots Holdings Ltd’s remaining stake, also contributed to their strong first quarter results.
The US drugstore chain operator also pointed out that they are currently on track in terms of achieving its target goal of $650 million in savings from the deal with Alliance Boot. It is their target for this fiscal year that is set to end on the month of August 2015.
Despite the fact that the company’s result is better than the expected result, its margins still stay under pressure. It is all because of the lower insurer prescription payments in the middle of generic drug price hike and increased competition.
The gross margins of Walgreen Co WAG.N fell down by one percent to 27.1 percent during the fiscal’s year first quarter that ended on the 30th of November 2014. This marked the fifth continuous quarter decline for margins.