Loyalty cards help drive Walgreen profits higher

Walgreen, the largest US drugstore retailer, said fiscal fourth-quarter profit rose 86 per cent after its customer-loyalty card boosted sales.

Net income increased to $657 million, or 69 cents per share, in the quarter ended August 31st from $353 million, or 39 cents per share, a year earlier, said the Deerfield, Illinois-based company yesterday.

Profit matched the average of 20 analysts’ estimates.

Chief executive Gregory Wasson has used data from loyalty-card holders’ purchases to improve the selection of merchandise in the front of Walgreen’s stores.

“While customer traffic remains challenged, we believe we are starting to see the benefit of balance rewards,” said Deborah Weinswig, an analyst at Citigroup in New York. She recommended Walgreen stock as a buy. – (Bloomberg)