Walgreen surpasses quarterly expectations on reduced business costs, inventory controlWalgreen Co, the largest drugstore in the U.S., recently announced that it achieved a 19 percent increase in profits during the first quarter. The company's earnings handily beat the estimates of economists and were fueled by better inventory control and efficiency gains to its supply chain.

For the quarter, Walgreen said that net income rose to 62 cents a share, surpassing the expectations of economists who had predicted a 54-cent gain. Shares for the drugstore giant rose $3.10 to $39.92 today in trading on the news, their highest showing in more than three months.

Walgreen affirms that the upbeat earnings are a result of its efforts to remodel its stores to shore up its inventory, eliminating items that were slower selling. Because of its efforts to more effectively manage its supply chain, Walgreen's chief financial officer, Wade Miquelon, asserts that the company is on track to meet its goal of lowering business costs by $1 billion this year. Moreover, through its acquisitions of smaller chains, like Duane Reade Holdings Inc. in New York City, Walgreen is expanding to cities it had a smaller presence in before.

Miquelon told reporters in a conference call that Walgreen also benefited from fewer inventory writedowns than a year ago as it increased its inventory efficiency.
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