Walgreen Co., one of the largest U.S. drugstore chains, posted a higher quarterly profit on Monday, boosted by new stores and an inventory credit.
The company also said it still plans to open 500 new stores during the current fiscal year and more than 500 stores in fiscal 2008.
Walgreen is on track to surpass its goal of having 7,000 stores in 2010, Chief Executive Jeffrey Rein said in a statement.
Profit was $561.2 million, or 56 cents per share, in the fiscal third quarter, compared with $469.2 million, or 46 cents, a year earlier.
Analysts, on average, expected the Deerfield, Illinois-based chain to earn 53 cents per share, according to Reuters Estimates.
In the latest quarter, the company posted an inventory credit of $3.5 million, versus a provision of $24.2 million in the year-earlier period, due to less inflation than anticipated among pharmacy inventories.
Sales rose 12.5 percent to $13.7 billion. Total sales in stores open at least a year, a measure of retail strength known as same-store sales, rose 7.8 percent.
Prescription sales rose 13.8 percent overall and rose 9 percent in comparable stores. Comparable sales of general merchandise climbed 5.6 percent.
Walgreen has expanded at a rapid clip by opening new stores and buying small companies. It operated 5,751 stores as of May 31, up from 5,251 a year earlier. Rival CVS/Caremark Corp. had 6,168 stores as of May 26.
Walgreen trades at nearly 19.1 times next year's expected earnings, while CVS trades at a multiple of about 15.8, according to Reuters data.