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Jean Coutu records 2Q, first half sales gains
October 10th, 2012
LONGUEUIL, Quebec – The Jean Coutu Group and its retail drug store network saw revenue climb in the fiscal 2013 second quarter.
The company on Wednesday also reported improved operating results in the quarter but posted declined net earnings related to a sale of some of its stake in Rite Aid Corp.
For the second quarter ended Sept. 1, total retail sales for the store network grew 3.4% to $975.5 million (Canadian) from $943.1 million a year earlier. Revenue was up 3.9% year over year in the pharmacy and 2.4% in the front end.
Same-store sales for the retail network in the quarter edged up 2.6%, reflecting gains of 3% in the pharmacy and 1.6% in the front end. Coutu said sales of nonprescription drugs, which represented 8.4% of total retail sales, increased by 3.9% compared with 2.9% in the prior-year period.
Prescription count rose 6.1% overall and 5.2% on a same-store basis. During the second quarter, generic drugs reached 61.% of dispensed prescriptions versus 57.2% a year earlier. The company said the introduction of lower-priced generic drugs pared retail pharmacy sales growth by 2% in the quarter, while price cuts on generic drugs mandated by the Quebec government negatively impacted those sales by 1%.
Jean Coutu's retail network opened five stores in the second quarter, including three relocations and one major remodel. As of Sept. 1, the company operated 402 franchised drug stores in Quebec, New Brunswick and Ontario under the banners PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté.
Meanwhile, second-quarter revenue for the Jean Coutu Group gained 3.7% to $658.7 million from $635.2 million a year ago. The company's sales consist mainly of sales and other revenue from franchising activities and from merchandise sales to franchisees via its distribution centers.
Operating income before amortization (OIBA) in the quarter grew 8.6% to $76.9 million from $70.8 million a year earlier. The company attributed the increase primarily to a strong operational performance of its generic drugs segment and franchising activities.
Net income in the second quarter came in at $51.2 million, or 23 cents per share, compared with $66.4 million, or 29 cents per share, in the year-ago period. Jean Coutu said the decrease stems mainly from a gain related to a sale of Rite Aid shares, for a total proceed of $22 million, prior-year quarter.
According to Coutu, the net profit before gains related to the Rite Aid investment and change in fair value of other financial assets amounted to $50 million, or 23 cents per share, in the fiscal 2013 quarter versus $44.6 million, or 19 cents per share, a year earlier.
"The results of the second quarter and first half of fiscal 2013 demonstrate with eloquence our organization's excellent performance," president and chief executive officer François Coutu said in a statement. "The implementation of our business strategies allowed us once again to post a significant growth of our operating income despite the generic drugs price reductions. Therefore, we remain determined to continue the expansion of our network and the development of our offer in order to achieve the objectives we have set."
For the fiscal 2013 first half, sales in the franchised store network increased 3.9% to $1.97 billion. Same-store sales rose 3%, and prescriptions filled grew 6.3% overall and 5.2% on a same-store basis. Jean Coutu Group's revenue gained 3.4% to $1.34 billion.