Canada's Jean Coutu Group sees 0.1% lift in Q1 same-store sales

LONGUEUIL, Quebec — Facing a “highly competitive market,” Canadian pharmacy retailer the Jean Coutu Group reported on Tuesday a slight increase in first-quarter revenues and a 0.1% lift in same-store sales.

“The results of the first quarter of fiscal 2015 demonstrate the effectiveness of our business plan in spite of a highly competitive market,” stated Francois Coutu, president and CEO. “The commercial strategies that we continue to roll out, the expansion of our network and the commitment of our affiliated pharmacist owners and their employees will contribute to our growth in the upcoming quarters as well as to maintain our leadership.”

Revenues, which consist mainly of sales and other revenues derived from franchising activities, totaled Canadian $688.6 million during the quarter ended May 31, compared with C$681.6 million in the year-ago period. According to the company, driving the increase is overall market growth and the expansion of the PJC network of franchised stores despite the deflationary impact on revenues of the volume increase in prescription of generic drugs compared with brand name drugs as well as the price reductions of generic drugs.

On a same-store basis, the PC network’s retail sales increased by 0.1%, pharmacy sales increased 0.3%, and front-end sales decreased by 0.5%.

Net profit totaled C$54.1 million, or 29 Canadian cents per share, during the quarter compared with C$108.6 million, or 51 Canadian cents per share, in the year-ago period. The company stated that the decrease in net profit is attributable to the gain of C$54.4 million related to the investment in Rite Aid recognized during the first quarter of fiscal year 2014.

Net profit before gains related to the investment in Rite Aid amounted to C$54.1 million, or 29 Canadian cents per share, compared with C$54.2 million, or 26 Canadian cents per share, in the year-ago period.

During Tuesday morning’s conference call with analysts, Coutu noted that the company launched several promotions during the quarter, including the introduction of a new exclusive line of beauty products called Jouviance Makeup for sensitive skin.

Coutu also told analysts that it is “very active” on the acquisition front. “We have four projects that are being, at this time, negotiated and two of these we have reached an agreement. And there are more than 12 projects that we are studying now,” Coutu told analysts.

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