<PAGE>   1
                                   Exhibit 11

                       ARBOR DRUGS, INC. AND SUBSIDIARIES
                       COMPUTATION OF EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                        Three Months Ended               Year Ended
(In thousands, except per share data)                         July 31,                    July 31,
                                                      ------------------------        -----------------------
                                                       1997          1996              1997           1996
                                                      -------       -------           --------      ---------
<S>                                                   <C>           <C>               <C>           <C>
A. Net Income                                         $ 9,769       $ 7,131           $ 34,430 (a)   $ 27,024 (a)
                                                      =======       =======           ========       ========
Weighted average number of                                                           
common shares outstanding                             39,198         37,596             38,730         37,417
                                                                                     
Effect of the issuance of                                                            
stock options and assumed                                                            
exercise of stock options                                                            
at prices which are lower                                                            
than the average market                                                              
price of the common shares                                                           
during the period, using the                                                         
treasury stock method                                  1,370            886                751            959
                                                      ------         ------              -----         ------
                                                                                     
B. Average number of common                                                          
shares and common                                                                    
equivalent shares for                                                                
primary earnings per share                            40,568         38,482             39,481 (a)     38,376 (a)
                                                      =======       =======           ========       ========
                                                                                     
                                                                                     
Weighted average number of common                                                    
shares outstanding                                    39,198         37,596             38,730         37,417
                                                                                     
                                                                                     
Effect of the issuance of stock                                                      
options and assumed exercise of                                                      
options at prices which are lower                                                    
than the market price of common                                                      
stock at end of the period when                                                      
such price is higher than average                                                    
market price of the common shares                                                    
during the period, using the treasury                                                
stock method                                           1,637            886              1,297            959
                                                      ------         ------              -----         ------
                                                                                     
                                                                                     
C. Average number of common shares                                                   
and common equivalent shares                                                         
for fully diluted earnings per share                  40,835         38,482             40,027 (a)     38,376 (a)
                                                      =======       =======           ========       ========
                                                                                     
                                                                                     
Primary earnings                                                                     
per share:    A / B                                    $0.24          $0.19              $0.87 (a)      $0.70 (a)
                                                      =======       =======           ========       ========
                                                                                     
                                                                                     
Fully diluted earnings                                                               
per share:  A / C                                      $0.24          $0.19              $0.86 (a)      $0.70 (a)
                                                      =======       =======           ========       ========


 (a)   These amounts agree with the related amounts in the Consolidated Statements of Income.

          All share amounts have been restated to give effect to the stock split declared on November 19, 1996 and
          distributed on December 17, 1996.
</TABLE>

                                                                              57