Shoppers Drug Mart's Q4 driven by front end

Company continues search for next leader

TORONTO — Front-end sales rendered positive results for Shoppers Drug Mart during the fourth quarter ended Jan. 1, the Canadian drug store chain said.

Strong sales gains in the beauty, confection and convenient food and beverage categories drove front-end sales up 5.5%, Shoppers reported. The big gain, the company said, contributed to the 2.9% increase of its fourth-quarter sales to nearly $2.6 billion.

Prescription sales for the chain, however, fell about 0.2%.

Shoppers Drug Mart also disclosed that its fourth-quarter net earnings per share reached nearly 80 cents.

Meanwhile, sales during fiscal year 2010 totaled $10.4 billion, compared with about $10.1 billion in 2009.

During the fourth quarter, 10 drug stores were opened, eight of which were relocations, and the company completed five major drug store expansions. For the fiscal year ended Jan. 1, Shoppers opened or acquired 75 drug stores, 43 of which were relocations, and consolidated or closed 10 smaller drug stores and three home health care stores.

Looking ahead, the company expects total sales to increase by between 2% and 3% in 2011. Shoppers also said it anticipates same-store sales growth between 2% and 3% in the front end and flat same-store sales growth in pharmacy.

As previously reported, Shoppers president and CEO Jürgen Schreiber exited the company. Shoppers Drug Mart said while it is continuing to look for a replacement, board chairman David Williams will serve as the company’s president and CEO on an interim basis.

“Given that fiscal 2010 was a particularly challenging year on a number of fronts, we are encouraged by our performance in the fourth quarter and the momentum it provides as we prepare to confront the challenges and capitalize on the opportunities that lie ahead in 2011 and beyond," Williams said. "These operating and financial results speak not only to the strength of our brand and the power of our value proposition with patients and customers, but also to the leadership of our associate-owners and the capabilities of their teams at store level."

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