"We had another terrific quarter," said chairman and CEO DavidBernauer, noting that improved gross margins and, higher thanexpected sales for prescription and non-pharmacy items helped fuelthe strong numbers. Investment in the chain's digital photo labsalso improved the overall profitability of the company's photofinishing business, he said.

Sales were at a record $1.8 billion for the third quarter endingMay 31, reflecting a 13.1% increase during the period. Comparablestore sales showed an 8.7% increase in the quarter, while front-endcomparable store sales rose 6.1% during the same period.

Sales and earnings also were strong during the first nine monthsof 2005, with sales increasing 2.8% to $317 billion during thatperiod. Net earnings for the nine months climbed 20.0% to $1.231billion or $1.20 per diluted share (compared to last year's $1.025billion or 99 cents per diluted share.)