Walgreen (WAG) logged a lighter-than-expected 16% jump in fiscal third-quarter earnings on Tuesday as the drug-store operator suffered from a dip in customer traffic.
Shares of the No. 1 pharmacy chain retreated about 5% in premarket trading on the disappointing results.
Walgreen said it earned $624 million, or 65 cents a share, last quarter, compared with a profit of $537 million, or 62 a year earlier.
Excluding one-time items, it earned 85 cents a share, up 18.1% from the year before but below consensus calls for 91 cents.
Sales jumped 3.2% to $18.3 billion, trailing the Street’s view of $18.43 billion.
Front-end comparable store sales inched up 0.4%, while customer traffic in comparable stores dropped 3.9% and basket size rose 4.4%. Total same-store sales gained 1.4%.
On the prescription side, total sales increased 3.4% and 2% on a same-store basis.
“Our front-end sales are still not up to our expectations, and while the economy remains challenging, increasing customer traffic and front-end sales are our near-term priorities,” CEO Greg Wasson said in a statement. He did point to “strengthening” in Walgreen’s pharmacy performance that led to a higher market share.
Deerfield, Ill.-based Walgreen saw its shares fall 5.31% to $45.50 ahead of Tuesday’s opening bell, trimming their 30% surge so far in 2013.