Walgreen Co.’s fiscal fourth-quarter earnings soared 86 percent, as the nation’s largest drugstore chain booked gains from its method of inventory accounting and its acquisition of a stake in European health and beauty retailer Alliance Boots.
The Deerfield, Ill., company with Akron operations said Tuesday that it earned $657 million, or 69 cents per share, in the quarter that ended Aug. 31. That compares with earnings of $353 million, or 39 cents per share, a year ago. Revenue climbed 5 percent to $17.94 billion.
Adjusted earnings totaled 73 cents per share, excluding acquisition-related costs among other items.
Analysts forecast earnings of 72 cents per share on $17.96 billion in revenue, according to FactSet.
The company recorded an $8 million “last-in-first-out” (LIFO) inventory benefit in this year’s quarter, compared with a $132 million charge last year. LIFO is a method of accounting for inventory that assumes a company sells its newest inventory first. The company takes a credit or charge each quarter according to the anticipated inflation rate for the year.
The company attributed the big swing to lower-than-anticipated prescription drug inventory ahead of a transition it made to AmerisourceBergen Corp. Walgreen had announced earlier this year that it and Alliance Boots were buying an ownership stake in drug distributor AmerisourceBergen Corp.
Last year, Walgreen acquired a 45 percent stake in Swiss-based Alliance Boots for about $4 billion in cash plus 83.4 million Walgreen shares. Walgreen, which ranks 37th in the 2013 Fortune 500 list of biggest companies, earned $2.45 billion, or $2.56 per share, in fiscal 2013 on $72.22 billion in revenue.