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Longs net falls
27%; stock sinks

The chain cites higher pharmacy
expenses and higher expansion
costs for the shortfall

Bloomberg News

WALNUT CREEK, Calif. -- Longs Drug Stores Corp.'s shares fell 11.2 percent today after the operator of 417 drugstores in the Western United States said fiscal first-quarter earnings fell 27 percent on higher pharmacy expenses and the cost of buying and opening new stores.

Longs shares fell $2.75 to close at $21.75 on the New York Stock Exchange, after earlier falling as low as $20.87. The stock has fallen nearly 16 percent so far this year and is down 34.5 percent from a year ago.

The company said late yesterday that net income for the quarter ended April 27 fell to $12 million, or 31 cents a share, from $16.4 million, or 42 cents, a year ago. Per-share earnings were 30 percent below expectations of 44 cents, the average estimate of five analysts polled by First Call/Thomson Financial.

"The company's financial performance this quarter comes as a major disappointment," CEO Stephen Roath said, adding that Longs still expects to have a double-digit earnings increase for the full year.

First-quarter sales rose 9.9 percent to $955.7 million from $869.4 million, Longs said. The Walnut Creek, Calif.-based company has 32 drugstores in Hawaii. It also has stores in California, Washington, Nevada, Colorado, and Oregon.