Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

The number of shares outstanding of the registrant's Common Stock, $.078125 par value, as of June 30, 2004 was 1,024,527,726.

Page 1 of 16

WALGREEN CO. AND SUBSIDIARIES

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

The consolidated condensed financial statements included herein have been prepared by the company pursuant to the rules and regulations of the Securities and Exchange Commission. The Consolidated Condensed Balance Sheet as of May 31, 2004, the Consolidated Condensed Statements of Earnings for the three and nine months ended May 31, 2004 and 2003, and the Consolidated Condensed Statements of Cash Flows for the nine months ended May 31, 2004 and 2003, have been prepared without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and the notes ther eto included in the company's latest annual report on Form 10-K.

In the opinion of the company the consolidated condensed statements for the unaudited interim periods presented include all adjustments, consisting only of normal recurring adjustments, necessary to present a fair statement of the results for such interim periods. Because of the influence of certain holidays, seasonal and other factors on the company's operations, net earnings for any interim period may not be comparable to the same interim period in previous years, nor necessarily indicative of earnings for the full year.

2

	WALGREEN CO. AND SUBSIDIARIES
	CONSOLIDATED CONDENSED BALANCE SHEETS
	(UNAUDITED)
	(Dollars in Millions)
					May 31,		August 31,
					2004		2003
Assets
	Current Assets:
		Cash and cash equivalents			$ 1,577.0		$ 1,017.1
		Accounts receivable, net			1,298.3		1,017.8
		Inventories			4,359.8		4,202.7
		Other current assets			152.6		120.5
			Total Current Assets		7,387.7		6,358.1
	Property and Equipment, at cost, less
		accumulated depreciation and amortization of
		$1,659.8 at May 31 and $1,422.3 at August 31			5,255.4		4,940.0
	Other Non-Current Assets				111.0		107.8
			Total Assets		$ 12,754.1		$ 11,405.9
Liabilities & Shareholders' Equity
	Current Liabilities:
		Trade accounts payable			$ 2,277.1		$ 2,077.0
		Accrued expenses and other liabilities			1,407.4		1,237.7
		Income taxes			139.4		105.8
			Total Current Liabilities		3,823.9		3,420.5
	Non-Current Liabilities:
		Deferred income taxes			279.3		228.0
		Other non-current liabilities			645.9		561.7
			Total Non-Current Liabilities		925.2		789.7
	Shareholders' Equity
		Preferred stock $.0625 par value; authorized
			32 million shares; none issued		-		-
		Common stock $.078125 par value; authorized
			3.2 billion shares; issued 1,025,400,000
			at May 31 and 1,024,908,276 at August 31		80.1		80.1
		Paid-in capital			670.8		697.8
		Retained earnings			7,318.1		6,417.8
		Treasury stock, at cost; 1,875,559 shares at May 31			(64.0)		-
			Total Shareholders' Equity		8,005.0		7,195.7
			Total Liabilities & Shareholders' Equity		$ 12,754.1		$ 11,405.9

The accompanying Notes to Consolidated Condensed Financial

Statements are an integral part of these Statements.

3

WALGREEN CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(UNAUDITED)
(In Millions Except Per Share Data)
				Three Months Ended					Nine Months Ended
				May 31,		May 31,			May 31,			May 31,
				2004		2003			2004			2003
Net sales				$ 9,578.5		$ 8,328.0			$ 28,081.5			$ 24,259.0
Costs and Deductions:
	Cost of sales			7,000.7		6,098.0			20,498.0			17,685.2
	Selling, occupancy and
		administration		2,033.1		1,769.3			5,956.8			5,167.2
				9,033.8		7,867.3			26,454.8			22,852.4
Other Income:
	Interest income			3.6		3.0			10.4			7.9
	Other income			3.0		12.0			15.7			29.0
				6.6		15.0			26.1			36.9
Earnings before income tax provision				551.3		475.7			1,652.8			1,443.5
Income tax provision				206.7		179.6			619.8			544.9
Net earnings				$ 344.6		$ 296.1			$ 1,033.0			$ 898.6
Per share-
	Basic			$ .34		$ .29			$ 1.01			$ .88
	Diluted			$ .33		$ .29			$ 1.00			$ .87
	Dividends declared			$ .043125		$ .03750			$ .129375			$ .11250
Average shares outstanding				1,023.3		1,024.9			1,024.2			1,024.9
Dilutive effect of stock options				7.0		6.2			7.4			6.7
Average shares outstanding
	assuming dilution			1,030.3		1,031.1			1,031.6			1,031.6

The accompanying Notes to Consolidated Condensed Financial

Statements are an integral part of these Statements.

4

	WALGREEN CO. AND SUBSIDIARIES
	CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
	(UNAUDITED)
	(Dollars in Millions)
				Nine Months Ended
				May 31,		May 31,
				2004		2003
Net cash provided by operating activities				$ 1,393.3		$ 1,105.6
Cash flows from investing activities:
	Additions to property and equipment			(630.9)		(573.0)
	Net proceeds from corporate-owned life insurance policies			8.6		9.1
	Disposition of property and equipment			16.1		68.8
Net cash used for investing activities				(606.2)		(495.1)
Cash flows from financing activities:
	Stock purchases			(184.6)		(149.2)
	Proceeds related to employee stock plans			101.3		60.3
	Cash dividends paid			(132.6)		(114.0)
	Other			(11.3)		(3.1)
Net cash used for financing activities				(227.2)		(206.0)
Changes in cash and cash equivalents:
	Net increase in cash and cash equivalents			559.9		404.5
	Cash and cash equivalents at beginning of year			1,017.1		449.9
Cash and cash equivalents at end of period				$ 1,577.0		$ 854.4

The accompanying Notes to Consolidated Condensed Financial
Statements are an integral part of these Statements.

5

WALGREEN CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(1) Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At May 31, 2004 and August 31, 2003, inventories would have been greater by $784.9 million and $729.7 million, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. LIFO inventory costs can only be determined annually when inflation rates and inventory levels are finalized; therefore, LIFO inventory costs for interim financial statements are estimated. Cost of sales is primarily based upon point-of-sale scanning information with an estimate for shrinkage and adjusted based on periodic inventories.

(2) The company capitalized interest expense as part of significant construction projects. The amounts capitalized were $.2 million and $.6 million for the quarter and nine-month periods ended May 31, 2004 versus $.4 million and $1.2 million for the comparable periods of a year ago.

(3) The company remains secondarily liable on 49 assigned leases. The maximum potential of undiscounted future payments is $13.0 million as of May 31, 2004. Lease option dates vary with some extending to 2013. Most of the assignments were a result of the sale of the "Wag's" restaurants in August 1988. The company has recorded liabilities in cases where the assignee has defaulted on its obligations. Such liabilities are not material to the financial statements.

(4) The company applies Accounting Principles Board (APB) Opinion No. 25 and related interpretations in accounting for its stock-based compensation plans. Accordingly, no compensation has been recognized based on the fair value of its grants under these plans. Had compensation costs been determined consistent with the method of Statement of Financial Accounting Standards (SFAS) No. 123 for options granted in fiscal 2004 and 2003, proforma net earnings and net earnings per common share would have been as follows:

6

WALGREEN CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Continued)

(5) On December 8, 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 was signed into law. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retirement health care benefit plans. The retiree medical obligations and costs reported do not reflect the impact of this legislation.

(6) The principal retirement plan for employees is the Walgreen Profit-Sharing Retirement Trust to which both the company and the employees contribute. The company's contribution, which is determined annually at the discretion of the Board of Directors, has historically related to pre-tax income. The profit-sharing provision was $49.0 million and $147.0 million for the quarter and nine-month periods as compared to $42.3 million and $128.4 million for the same periods last year.

The company provides certain health and life insurance benefits for retired employees who meet eligibility requirements, including age and years of service. The costs of these benefits are accrued over the period earned. The company's postretirement health and life benefit plans currently are not funded.

7

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

INTRODUCTION

Walgreens is engaged in the retail sale of prescription and nonprescription drugs and carries additional product lines, such as general merchandise, cosmetics, toiletries, household items, photofinishing, food and beverages. Customers can have prescriptions filled at the drugstore counter, as well as through the mail, by telephone, and on the Internet. The total number of drugstores at May 31, 2004 was 4,414 located in 44 states and Puerto Rico, which includes three mail service facilities.

The drugstore industry is highly competitive. In addition to other drugstore chains, independent drugstores, mail order prescription providers and Internet pharmacies, we also compete with various other retailers including grocery, variety, and discount stores.

The long-term outlook for prescription sales is strong due in part to the aging population, as well as the continued development of innovative drugs that improve quality of life and control healthcare costs. Although the effect of the new Medicare prescription drug legislation on retail pharmacy is difficult to ascertain at this time, it is expected to add to prescription sales; however, gross margins on these additional sales could be lower than we currently experience based upon what the government will pay. As an efficient provider, we feel we are positioned well for these industry developments. We continue with expansion into new markets and increased penetration in existing markets. We believe we are well staffed with pharmacists for both current demands and future growth, with only select market needs.

OPERATING STATISTICS

	Percentage Increases
	Three Months Ended May 31, 2004	Nine Months Ended May 31, 2004
Net Sales	15.0	15.8
Net Earnings	16.4	15.0
Comparable Drugstore Sales	10.4	11.3
Prescription Sales	17.2	18.3
Comparable Prescription Sales	13.4	14.5
Front-End Sales	11.2	12.0
Comparable Front-End Sales	5.6	6.4

	Percent to Sales
	Three Months Ended		Nine Months Ended
	May 31		May 31
	2004	2003	2004	2003
Gross Margin	26.9	26.8	27.0	27.1
Selling, Occupancy&       Administration Expenses	21.2	21.3	21.2	21.3

	Other Statistics
	May 31, 2004	May 31, 2003
Year to Date Prescription Sales as a %      of Net Sales	62.7	61.4
Year to Date Third Party Sales as a %of      Prescription Sales	91.5	90.6
Total Number of Stores	4,414	4,050

8

RESULTS OF OPERATIONS

Net earnings for the third quarter ended May 31, 2004, were $344.6 million or $.33 per share (diluted). This was a 16.4% increase in net earnings over last year. Net earnings for the nine months increased 15.0% to $1,033.0 million or $1.00 per share (diluted). This quarter's results included a $3.0 million pre-tax gain for receipt of our share of prescription drug antitrust litigation settlements. This compares to similar pre-tax settlements of $12.0 million recorded in the third quarter last year. The nine month periods included $15.7 million (pre-tax) in litigation settlements this year and $29.0 million (pre-tax) last year. Excluding these gains, earnings rose 18.7% to $342.7 million in the third quarter and 16.2% to $1,023.2 million for the nine-month period. The quarter's net earnings increase resulted from improved sales, higher gross margin rates and slightly lower expense ratios. The nine-month net earnings increase resulted from improved sales and lower expense ratios, partially offs et by lower gross margin rates.

Net sales increased by 15.0% in the third quarter to $9,578.5 million, and rose by 15.8% to $28,081.5 million for the first nine months. Drugstore sales increases resulted from sales gains in existing stores and added sales from new stores, each of which include an indeterminate amount of market-driven price changes. Comparable drugstore (those open at least one year) sales were up 10.4% for the quarter and 11.3% for the first nine months. New store openings accounted for a sales increase of 6.9% for the quarter and 7.0% for the first nine months. We operated 4,414 drugstores as of May 31, 2004 compared to 4,050 a year earlier.

Prescription sales increased 17.2% for the third quarter and 18.3% for the first nine months. Prescriptions accounted for 64.0% of sales in the quarter and 62.7% year-to-date. This compares to 62.8% and 61.4% for the same periods last year. Prescription sales in comparable drugstores increased 13.4% for the quarter and 14.5% for the nine-month period. The effect of generic drugs, which have a lower retail price, replacing brand name drugs reduced prescription sales by 1.8% in the quarter and 1.4% for the nine-month period. Third party sales, where reimbursement is received from managed care organizations and government and private insurance, were 91.5% of prescription sales year to date compared to 90.6% a year ago.

Non-prescription (front-end) sales increased 11.2% in the third quarter and 12.0% for the first nine months, primarily driven by increased customer counts. Front-end sales were 35.7% of total sales for the quarter and 37.1% for the nine-month period. This compares to 36.9% and 38.3% for the same periods a year ago. Comparable front-end drugstore sales were up 5.6% for the quarter and 6.4% for the first nine months.

Gross margins were 26.9% of sales in the quarter and 27.0% for the nine-month period compared to 26.8% and 27.1% for the comparable periods last year. Prescription margins remained relatively stable for the quarter but decreased for the nine-month period because greater portions of sales were third party sales, which typically have lower margins than cash prescriptions. During the quarter, this decrease was offset by steady introductions of new generics into the marketplace. As state governments continue their attempts to reduce reimbursement levels, we continue to evaluate the impact of these reimbursement rates on profitability on a case by case basis. Non-prescription margins increased for both the quarter and the nine-month period due to our sales mix moving to higher margin categories, especially digital film processing.

We use the LIFO method of inventory valuation, which can only be determined annually when inflation rates and inventory levels are finalized; therefore, LIFO inventory costs for interim financial statements are estimated. Cost of sales includes a LIFO provision of $12.7 million ($.01 per share) and $55.2 million ($.03 per share) for the quarter and nine-month periods ended May 31, 2004 versus $9.0 million (less than $.01 per share) and $55.7 million ($.03 per share) for the same periods a year ago. This quarter our estimated annual inflation rate was reduced to 1.50%, from our estimate of 1.75% at February 29, 2004, primarily due to lower than projected prescription inflation. Last year's third quarter estimate was reduced to 1.75% from the prior quarter's estimate of 2.25%, due to lower than projected over-the-counter drug product inflation.

9

Selling, occupancy and administration expenses decreased to 21.2% from 21.3% of sales in the quarter and nine-month period. The decrease in the quarter was principally caused by other store and headquarters expenses, which are being spread over a larger sales base due to our store expansion program. This decrease was offset in part by costs associated with our ongoing conversion from analog to digital photo labs. The nine-month period decrease was principally caused by lower occupancy and other store expenses partially offset by higher advertising costs.

The effective tax rate was 37.5% for the quarter and nine-month period this fiscal year and 37.75% for the comparable periods in fiscal year 2003.

CRITICAL ACCOUNTING POLICIES

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and include amounts based on management's prudent judgments and estimates. Actual results may differ from these estimates. Management believes that any reasonable deviation from those judgments and estimates would not have a material impact on our consolidated financial position or results of operations. To the extent that the estimates used differ from actual results, however, adjustments to the statement of earnings and corresponding balance sheet accounts would be necessary. These adjustments would be made in future statements. Some of the more significant estimates include liability for closed locations, liability for insurance claims, vendor allowances, allowance for doubtful accounts, and cost of sales. We use the following techniques to determine estimates: