LONGUEUIL, Quebec — Jean Coutu Group saw its retail store network and corporate sales rise slightly for the fiscal 2015 second quarter.
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The Canadian drug chain’s net earnings for the quarter, which ended Aug. 30, were in line with the consensus estimate of analysts.
Jean Coutu said Wednesday that fiscal 2015 second-quarter sales for its franchised store network rose 2.9% to $1.01 billion (Canadian) from $979.8 million a year earlier.
Revenue grew 2.1% in the front end and 3.1% in the pharmacy. Sales of over-the-counter drugs, which represented 8.3% of overall retail sales, gained 1%, compared with a 1.4% increase in the 2014 quarter.
Same-store sales in the franchise network were up 2.4% in the second quarter, reflecting gains of 1.6% in the front end and 2.7% in the pharmacy.
Prescription count grew 3.9% overall and 3.5% on a comparable-store basis in the quarter. Generic drugs accounted for 68.1% of prescriptions versus 67.2% a year ago. Jean Coutu noted that the introduction of new generics, which carry lower selling prices, reduced pharmacy retail sales growth by 0.4% in the quarter, while price reductions of generics pared the growth of those sales by 0.6%.
For the fiscal 2015 first half, the franchise network’s sales rose 1.8% to $2.03 billion, with gains of 1.2% in the front end and 2% in the pharmacy. Comp-store sales were up 1.3% for the period, including increases of 0.5% in the front end and 1.5% in the pharmacy. Prescriptions filled grew 4% overall and 3.6% on a same-store basis. Sales of nonprescription drugs, which represented 8.5% of all retail sales, inched up 0.4%, compared with 2.5% for the same period of fiscal 2014.
"We are very satisfied with the results of the second quarter of fiscal 2015, realized in spite of a restrictive regulatory context and an environment that is growingly competitive," Jean Coutu Group president and chief executive officer François Coutu said in a statement. "Our performance demonstrates the strength of our business plan. We are confident that the effective implementation of our strategies and the commitment of our affiliated pharmacist-owners and of their employees will allow us to pursue our growth and remain the leader in our sector."
On the corporate side, Jean Coutu Group’s sales in the fiscal 2015 second quarter came in at $674.4 million, up 3.2% from $653.6 million a year earlier. For the first half, revenue rose 2.1% to $1.36 billion from about 1.34 billion in the prior-year period. Jean Coutu said the gain stems from overall market growth and the expansion of the franchised store network, partially offset by the deflationary impact increased generic drug sales and price reductions of generics.
Operating income before amortization (OIBA) climbed to $81 million in the second quarter from $77.2 million a year earlier, fueled in part by the solid operational performance of the Pro Doc generic drugs segment and franchising activities, according to Jean Coutu.
Net income for the fiscal 2015 second quarter totaled $53.6 million, or 28 cents per share, compared with $208.2 million, or 99 cents per share, a year earlier. Jean Coutu noted that the decrease resulted from a gain of $158.3 million related to the company’s investment in Rite Aid during the 2014 quarter. Excluding the gains from the Rite Aid investment, 2014 second-quarter net earnings were $49.9 million, or 24 cents per share.
On average, analyst had projected Jean Coutu’s earnings per share at 29 cents for the fiscal 2015 second quarter.
During the second quarter, Jean Coutu’s retail network opened two stores and significantly renovated or expanded four stores. As of Aug. 30, the network had 416 drug stores in Quebec, New Brunswick and Ontario under the PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté banners.
