Drugstore chain operator Walgreen Co. (WAG) on Thursday said it will buy back $2 billion in shares, replacing a previous $1 billion plan announced in January 2007. In addition, the company's board declared a quarterly dividend, representing an increase of 22.2% over a year ago.
The new share repurchase program is part of a new capital policy and is seen as an effort by the company to return profit to shareholders.
Deerfield, Illinois-based Walgreens said it has approximately $655 million remaining in the previous $1 billion share purchase program. The company noted that it has repurchased more than $1.3 billion of common stock since 2004.
Walgreen's board declared a regularly quarterly dividend of 13.75 cents per share, representing an increase of 22.2% over the year-ago dividend. The dividend is payable December 12, 2009 to shareholders of record November 16, 2009. The board also set a long-term dividend payout target in a range of 30%-35% percent of net earnings.
Walgreens said it generated $4.1 billion in cash flow from operations in fiscal year 2009 as a result of its stronger operating performance and improved working capital. The company added that it is committed to reinvesting in core strategies, maintaining a strong balance sheet and flexibility and returning cash to shareholders from surplus cash flow in the form of dividends and share repurchases over the long term.
Greg Wasson, President and CEO of Walgreen Co., said, "The new capital policy demonstrates Walgreens ongoing commitment to delivering value to our shareholders. We are especially proud of our strong track record of consistently rewarding shareholders through dividends. In the last year, Walgreens paid more than $470 million in dividends to our shareholders. In addition, we have paid a dividend for 308 consecutive quarters and raised our dividend for 34 consecutive years."
In early October, Walgreen reported an increase in same-store sales and total sales for the month of September, helped by the seasonal flu shots. The company reported a 5.3% increase in sales at comparable stores for September, compared to the prior-year period. Comparable store front-end sales grew 2%. Walgreen's sales in September increased 10.3% to $5.349 billion from $4.849 billion in the same period of the prior year.
The tough economy has put a check on discretionary purchases, and Walgreen has been focusing on essential items like bread and milk in its non-pharmaceutical products. On the other hand, drug sales have witnessed an encouraging trend during these tough times, partly due to the company's 90-day prescriptions program.
In late September, Walgreen reported a decline in profit for the fourth quarter from last year, even as net sales advanced 7.6% on strong prescription sales growth. The company's net income for the quarter was $436 million, or $0.44 per share, compared to $443 million, or $0.45 per share, in the year-ago quarter. Quarterly net sales rose to $15.7 billion from $14.6 billion in the previous-year period.
Walgreen operates 7,045 drugstores in all 50 states, the District of Columbia and Puerto Rico.
In Thursday's regular trading session, WAG is trading at $39.36, up $0.61 or 1.57% on a volume of 2.46 million shares. In the past 52 weeks, the stock has been trading in a range of $21.28-$39.67.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.