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LONGUEUIL — Canadian pharmacy chain The Jean Coutu Group, which operates a network of 407 franchised stores in Quebec, New Brunswick and Ontario, reported a drop in net income in its first quarter, largely due to much smaller gains from the sale of Rite Aid shares versus the year-earlier period, the company stated.
The company stated that net profit in the quarter ended June 1 was C$108.6 million, or 51 Canadian cents per share, compared with C$397.3 million, or C$1.81 per share, in the year-ago period. The decrease in net profit is mainly attributable to the C$348.0 million gains related to the investment in Rite Aid recognized during the first quarter of fiscal year 2013 compared with a gain of C$54.4 million recognized during the first quarter of fiscal year 2014.
Net profit before gains related to the investment in Rite Aid and change in fair value of other financial assets amounted to C$54.2 million (26 Canadian cents per share) for the first quarter of fiscal year 2014 compared with C$51.6 million (24 Canadian cents per share) for the first quarter of previous fiscal year.
“We are satisfied with the results recorded in the first quarter. Operating income showed solid growth in spite of the deflationary impact of generic drugs on pharmacy sales" stated François Coutu, President and CEO. "The pharmacies affiliated to our network still show the best performance of the industry. We will therefore continue to implement effectively our business plan to pursue our growth over the coming quarters and maintain our leadership.”
During the quarter, the company sold 72.5 million shares in the Camp Hill, Pa.-based drug store chain Rite Aid and recently announced plans to sell another 40.5 million shares for C$110.8 million.
Jean Coutu holds about 105.9 million shares of Rite Aid, and the sale brings its share in the U.S. retailer down to 7.2%.
Jean Coutu operates a network of 407 franchised stores located in the provinces of Québec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté, It also owns ProDocLtd ("ProDoc"), a Québec-based subsidiary and manufacturer of generic drugs.