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Increased sales of generic drugs are helping the nation's largest drugstore chain set new sales and profitability records, officials at Walgreen Co confirmed. The company's latest quarterly financial report showed sales up 13% to $13.7 billion for the 3 months ending May 31, 2007, while net income jumped 20% to more than $561 million.
The chain's gross margin increased to 28.3%, up from 27.5% a year earlier, largely as a result of heavier sales of more profitable generic pharmaceuticals. Like other drug chains, Walgreens is benefiting from this year's increase in more profitable generic drugs, as patents expire on branded drugs, with annual sales of $12 billion during 2007.