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First quarter sales rise for Jean Coutu
July 7th, 2009
LONGUEIL, Quebec – Jean Coutu Group on Tuesday posted healthy revenue and same-store sales growth for its fiscal 2010 first quarter.
Total revenue for the quarter ended May 30 climbed 7.8% to $619.3 million (Canadian) from $574.3 million a year earlier, Coutu reported. The company attributed the growth primarily to the expansion of its franchised drug store network. Most of the company's revenue stems from merchandise sales to franchisees.
Coutu's franchised store network saw overall retail sales rise 6.7% to $883.9 million in the quarter from $828.1 million in the prior-year period. Pharmacy sales increased 8.7%, and front-end revenue gained 3.7%.
The network's same-store sales, meanwhile, edged up 3.9% in the first quarter. Pharmacy fueled most of the increase, with same-store sales up 5.7%, while the front end saw same-store revenue inch up 1.2%, Coutu said.
During the first quarter, seven stores were opened (including two relocations) and 13 stores were significantly renovated or expanded.
Coutu's net earnings for the quarter came in at $10.3 million (Canadian), or 4 cents per share, compared with a $20.2 million loss, or 8 cents per share, a year ago.
The company noted that its operating income before amortization (OIBA) rose 18.9% to $64.7 million from $54.4 million in the year-ago quarter.
"We are very satisfied with our first quarter’s results. Our organization showed a solid operating performance as well as sustained growth in its network’s retail sales. We have reached our objectives in spite of the economic conditions that prevailed during this quarter," chief executive officer Francois Coutu said in a statement.
"We remain confident in our ability to pursue our growth," he added. "We intend to maintain the rhythm of our network’s expansion and renovation projects and the development of our product offering."
Also in the quarter, Coutu's share of the loss from Rite Aid Corp., in which it holds a stake, totaled $30.9 million, or 13 cents per share, versus $53.4 million, or 21 cents per share, a year earlier. Coutu said the carrying value of its Rite Aid investment was $22.6 million as of May 30.
Earnings before specific items and the share of the loss in Rite Aid amounted to $38.5 million, or 16 cents per share, compared with $33.2 million, or 13 cents per share, in the prior-year period, according to Coutu.