UPDATE 1-Walgreen quarterly profit falls, shares slip

Dec 21 (Reuters) - Walgreen Co posted an unexpected decline in quarterly profit on Friday as the largest U.S. drugstore chain works on winning back shoppers after a major contract dispute with Express Scripts Holding Co.

Shares of Walgreen fell to $36.14 in premarket trading after closing at $37.55 on Thursday.

Walgreen has stepped up its marketing to bring back Express Scripts patients who were unable to fill their prescriptions at its stores during a now-resolved 8-1/2-month dispute.

At the same time, Walgreen has been promoting a new loyalty card, signing up more than 45 million shoppers in a few months.

Walgreen earned $413 million, or 43 cents per share, in the fiscal first quarter ended Nov. 30, down from $554 million, or 63 cents per share, a year earlier.

Earnings before unusual items fell to 58 cents per share from 71 cents per share a year earlier, missing analysts' average expectation of 70 cents per share, according to Thomson Reuters I/B/E/S.

This year's adjusted profit excluded costs related to acquisitions, an inventory provision and the effects from Hurricane Sandy.

Walgreen said it is now reporting results from its 45 percent stake in Alliance Boots on a one-quarter lag, rather than on a one-month lag. The deal, which closed on Aug. 2, cut adjusted EPS by 7 cents, rather than adding 3 cents as was expected if results had been reported using a one-month lag.

Sales fell 4.6 percent to $17.32 billion, with sales at stores open at least a year, or same-store sales, down 8 percent.

The sales performance was slightly worse than Walgreen said earlier this month. At that time, it said sales fell 4.5 percent to $17.34 billion and same-store sales declined 7.7 percent.