Sales at Jean Coutu rise in 4Q, full year

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LONGUEUIL, Quebec — The Jean Coutu Group reported increased corporate and retail store sales for its fiscal 2015 fourth quarter and full year but saw net income dip in both periods.

Jean Coutu store exterior_featuredThe Canadian drug chain said Wednesday that for the fourth quarter ended Feb. 28, sales in its franchised store network total $1.099 billion (Canadian), up 4% from $1.057 billion a year earlier. Revenue gained 4.4% in the pharmacy and 3.5% in the front end. Sales of nonprescription drugs, which represented 9.3% of total retail sales, were up by 4.2%, whereas these sales had decreased by 1.9% in the prior-year period.

On a same-store basis, the store network’s sales rose 3.4% in the quarter, reflecting increases of 4% in the pharmacy and 2.7% in the front end. Prescription count climbed 3.6% overall and 3.2% on a comparable-store basis during the period.

Jean Coutu said generic drugs accounted for 68.5% of prescriptions during the fourth quarter, compared with 67.2% a year earlier. The company noted that the increase in the number of generic prescriptions had a deflationary impact on pharmacy sales. In the fourth quarter, the introduction of new generics reduced pharmacy retail sales growth by 1% (and 0.8% for fiscal year 2015), and price reductions of generics trimmed the growth of those sales by another 0.6% (0.8% for fiscal 2015).

Fiscal 2015 sales for the franchised store network came in at $4.175 billion, up 2.8% from $4.060 in fiscal 2014. Pharmacy sales rose 3.2% and front-end sales edged up 2.2% in fiscal 2015. Same-store sales for the year were up 2.3%, including increases of 2.7% in the pharmacy and 1.5% in the front end. Script count gained 3.9% overall and 3.5% for comparable stores. Sales of over-the-counter drugs, which represented 8.8% of total retail sales, increased by 1.7% versus a gain of 0.6% in fiscal 2014.

During fiscal 2015, the franchise network opened eight stores, including three relocations, and closed two stores. Sixteen stores also were significantly renovated or expanded. As of Feb. 28, Jean Coutu operated a network of 416 franchised stores in Quebec, New Brunswick and Ontario under the banners PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté.

“The results of the fourth quarter and fiscal 2015 demonstrate our good operational performance and our efficiency in implementing the business plan. Total sales have achieved solid growth in a market which still remains very competitive,” Jean Coutu Group president and chief executive officer François Coutu said in a statement. “During the upcoming year, we expect to continue expanding our network and implement dynamic strategies, together with the pharmacist-owners affiliated to the Jean Coutu network, in order to sustain our growth.”

On the corporate side, Jean Coutu’s revenue rose 4.2% to $713.9 million in the fiscal 2015 fourth quarter from $685.4 million a year earlier. Full-year sales totaled $2.814 billion, up 2.9% from $2.733 billion in fiscal 2014.

Jean Coutu Group’s income consists of sales plus other revenue derived from franchising activities in Canada. Merchandise sales to franchisees through its distribution centers account for most of the company’s sales.

Net earnings were $55.2 million, or 30 cents per share, for the 2015 fourth quarter, compared with $57.7 million, or 30 cents per share, in the year-ago period. For fiscal 2015, net income came in at $218.9 million, or $1.17 per share, versus $437 million, or $2.12 per share, in fiscal 2014. Jean Coutu said the decrease in net profit stems mainly from gains of $212.7 million related to the company’s investment in Rite Aid recognized during fiscal 2014. Net profit before gains related to the Rite Aid investment was $224.3 million, or $1.09 per share, for fiscal 2014.




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