Walgreen Co.'s (NYSE:WAG) fiscal fourth-quarter earnings jump of 86 percent is attributed to an increase in its prescription sales along with its acquisition of a stake in European health and beauty retailer Alliance boots.
Walgreen earned $657 million and revenue rose 5 percent to $17.96 billion in the fourth quarter. For fiscal 2013, Walgreen earned $2.45 billion, or $2.56 per share.
"We saw improvement in our daily living business, resulting from the investments we made and enhanced execution. We also saw continued strength in our pharmacy business as we increased our retail pharmacy market share for the fiscal year to 19.1 percent, and we continued to make great progress on controlling selling, general and administrative costs," said Walgreens President and CEO Greg Wasson in a company statement.
Last year, Walgreen bought a 45 percent share in Alliance Boots, the largest drug chain in the U.K., and has an option to buy the rest of the business in 2014. Walgreen achieved $154 million in savings and added revenue—much higher than its previous estimates—from its partnership with the retailer.
Plus, prescription sales, accounting for around 64 percent of Walgreen's revenue, rose 6.1 percent.
Walgreen also attributed the strong quarterly earnings to lower prescription drug inventory ahead of a transition to AmerisourceBergen Corp. Earlier this year, Walgreen bought an ownership stake in the drug distributing giant.