Walgreen profit gains as generic, store sales rise

NEW YORK (Reuters) - Drugstore chain operator Walgreen Co reported a higher quarterly profit as sales of general merchandise and more profitable generic drugs rose.

Walgreen's profit rose 30 percent to $603 million, or 65 cents per share, in its fiscal third quarter, which ended on May 31, from $463 million, or 47 cents per share, a year earlier.

Gross profit margin rose 0.5 percentage point to 28.1 percent of sales.

Walgreen said efforts to renew an agreement with pharmacy benefits manager Express Scripts Inc failed and that it would no longer be part of that company's network as of January 1, 2012.

As previously reported, sales at Walgreen's stores open at least a year grew 4.1 percent during the quarter. Same-store sales of general merchandise rose 3.9 percent. Quarterly sales rose 6.8 percent to $18.37 billion.

(Reporting by Phil Wahba; Editing by Derek Caney)