Top U.S. drugstore chain Walgreen Co is expected to post a third month of weak sales when it issues February data on Wednesday, which could put pressure on its shares and lead some analysts to review their profit expectations.

Walgreen already surprised investors with two consecutive months of same-store sales declines, raising questions about whether it was doing enough to drive fickle shoppers to spend while the economy remains weak and flu season winds down.

The company is updating its network of more than 7,160 stores and promoting health and wellness services such as clinics to drive growth in an uncertain environment.

Last month, Walgreen reached a deal to buy New York-based drugstore chain Duane Reade to take the top spot in New York City.

We are certainly feeling the effect of the economy. We are still seeing a cautious consumer buying fewer discretionary items, Chief Executive Greg Wasson told Reuters in February. I'm extremely confident in our strategy but I'm still cautious on the economy.

Walgreen has been a major provider of flu vaccinations, which helped drive traffic to its stores during the fall. But as the flu season tapers off, fewer people need to come in for the prescription drugs, over-the-counter medications and tissues which have long driven winter sales.

Analysts, on average, expect Walgreen's February same-store sales to rise 0.5 percent, according to Thomson Reuters data. They expect same-store sales to rise 0.6 percent at pharmacy counters and fall 0.9 percent at the front of the store, where general merchandise is sold.

Walgreen's same-store sales were down 1.1 percent in January and 0.3 percent in December. Before that, the last time same-store sales had declined was in February 2009, when they fell 1.9 percent.

Shares in the company have risen 4 percent, outpacing a 7.6 percent decline for rival CVS Caremark Corp and a 1.3 percent rise for Rite Aid Corp , in the six months since the chains began to administer flu shots.

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Some sales expectations for Walgreen have come down in recent days, but some earnings forecasts still appear to be too high, said SunTrust Robinson Humphrey analyst David Magee.

Magee expects Walgreen to post flat February same-store sales and earn 67 cents per share in the second quarter, which ended in February. His earnings forecast is the lowest among analysts tracked by Thomson Reuters I/B/E/S. The average forecast is 71 cents per share.

Our numbers were initially set with a fair amount of conservatism and we had expected that we might raise them as the year progressed. However, in light of continued sales weakness, they don't seem that low now, Magee wrote in a research note.

Walgreen had consistently posted higher same-store sales, including some double-digit percentage gains as recently as 2007.

But Morningstar analyst Matthew Coffina expects Walgreen's same-store sales to really decelerate in the next few years.

He pointed to the rise of mail-order pharmacies, which had a 20 percent share of the market in 2007, up from 13 percent in 1997. Meanwhile, chains such as Wal-Mart Stores Inc , Target Corp and supermarkets have also stepped up their pharmacy game, adding pressure to drugstores.

Walgreen has started to embrace the changing nature of prescription sales. It launched a 90-day refill program in late 2009 and signed up Caterpillar Inc as the first client in a direct-to-employer drug pricing program.

But it also faces heightened pressure from CVS, which has given pharmacy benefits customers the option of picking up drugs in its stores at their mail-order price. That Maintenance Choice plan boosted pharmacy same-store sales about 2.7 percentage points in CVS's fourth quarter. Its total same-store sales jumped 4.9 percent in that period.

All drugstores are expected to feel the pressure of a mild winter flu season following the busy autumn. The percentage of U.S. patients visiting doctors who went in for influenza-like illness was just 1.8 percent in the week that ended February 20, down from 7.7 percent at the end of October, according to the Centers for Disease Control and Prevention.

Analysts expect smaller chain Rite Aid to post a 1.7 percent decline in February same-store sales on Thursday, which would mark its ninth consecutive monthly drop.

(Reporting by Jessica Wohl; editing by Gunna Dickson, Phil Berlowitz)

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