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Walgreen profit margin slips on more promotions, slower generics

Friday, 20 Dec 2013 | 7:49 AM ET

Dec 20 (Reuters) - Walgreen Co, the largest U.S. drugstore operator, reported higher first-quarter sales but said an increase in promotions and a slowdown in the introduction of higher-profit generic drugs cut into the gross profit margin.

Net income rose to $695 million, or 72 cents per share, in the first quarter ended Nov. 30, from $413 million, or 43 cents per share, a year earlier, it said on Friday.

The chain's gross profit margin fell 1.3 percentage points to 28.1 percent of sales, hurt by increased promotions aimed at getting shoppers into stores, and a slowdown in the introduction of new generic drugs.

Sales rose 5.8 percent to $18.33 billion, slightly below the $18.35 billion that analysts had projected.

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