Retail News Breaks Archives
Jean Coutu generates 3Q revenue, earnings gains
January 12th, 2010
LONGUEUIL, Quebec – Jean Coutu Group Inc. posted robust sales growth and improved earnings and operating results for its fiscal 2010 third quarter.
The Canadian drug store retailer said sales in the quarter ended November 28 rose 9.3% to $678.1 million (Canadian) from $620.3 million a year earlier. Most of Coutu's sales consist of merchandise sales to franchise stores through its distribution centers.
Sales results also were strong for the franchise store network. In the quarter, total network sales climbed 8.6% to $923.2 million (Canadian) from $850 million a year ago, with pharmacy sales up 8.8% and front-end sales up 8.9%.
The retailer noted that customer concern about the H1N1 flu virus fueled sales of over-the-counter drugs. During the third quarter, sales of nonprescription drugs — accounting for 10% of total retail sales — jumped 16%, compared with a 6.4% increase a year earlier, the company reported.
Overall network same-store sales rose 6.3% in the fiscal 2010 third quarter, with the pharmacy seeing a 6.5% uptick and the front end posting a 6.6% increase in same-store results. Total same-store sales rose 3.2% in the prior-year quarter.
On the operating side, Coutu said that operating income before amortization (OIBA) grew 19% to $71.5 million during the fiscal 2010 third quarter from $60.1 million a year ago. The retailer attributed the increase primarily to a strong operational performance in franchising activities and its Pro Doc subsidiary.
Coutu also reported that no share of loss in Rite Aid Corp. was accounted in its fiscal 2010 third-quarter earnings, compared with $431.7 million, or $1.79 per share, in the prior-year period. The company said this is a noncash charge.
At the bottom line, Coutu's fiscal 2010 third-quarter net income came in at $44.6 million (Canadian), or 19 cents per share, compared with a net loss of $399.2 million, or $1.66 per share, in the year-ago period.
Coutu said earnings before specific items and its share of loss in Rite Aid totaled $44.2 million, or 19 cents per share, in the third quarter, up from $36.7 million, or 15 cents per share, a year earlier.
"We are very pleased with the third quarter's results," president and chief executive officer Francois Coutu said in a statement. "Our network's continuous growth, the solid operating performance of our organization and the strength of the pharmacy industry allowed us to show a significant increase in our OIBA. We are determined to continue applying our business plan efficiently in order to reach the goals we have set."
Coutu added that during the third quarter, there were five store openings, including one relocation, in the franchise network as well as 14 store remodels or expansions.