Outpaces overall retail sales results at parent Loblaw Cos.
BRAMPTON, Ontario — Shoppers Drug Mart outperformed overall retail sales growth for parent Loblaw Cos. in the 2017 fourth quarter and fiscal year.
Loblaw said Thursday that for the fourth quarter ended Dec. 30, Shoppers Drug Mart posted revenue of $3.17 billion (Canadian), up 3.8% from $3.06 billion a year earlier.
Pharmacy sales totaled $1.42 billion in the quarter, an increase of 4.3% from $1.36 billion in the 2016 quarter. Sales in the front end advanced 3.4% to $1.75 billion from nearly $1.7 billion.
Same-store sales at Canada’s largest drug chain grew 3.6% in the fourth quarter, led by the pharmacy. Comparable-pharmacy sales rose 3.9%, up from 2.5% growth in the prior-year period, while front-end comp-store sales gained 3.5%, compared with growth of 4.1% a year ago.
Prescription count climbed 4.5% for the quarter, down from 5% in the year-ago quarter. On a same-store basis, dispense prescriptions advanced 4.3%, compared with 4.5% grwoth a year earlier. The company noted that the average prescription value dipped 0.1% year over year, improving from a 2% decrease in the 2016 quarter.
For full-year 2017, Shoppers Drug Mart saw revenue rise 3% to $12.58 billion from $12.21 billion in fiscal 2016. Sales in the pharmacy came in at $5.96 billion, a 4% gain from $5.73 billion a year ago. Front-of-store sales were $6.62 billion, up 2.2% from $6.48 billion.
The drug chain’s same-store sales increased 3% for fiscal 2017, compared with 4% year-over-year growth in 2016. In the front end, comp-store were up 2.9%, down from 5% growth a year earlier. Comparable pharmacy sales gained 3.1% versus a 2.9% increase in the prior-year period.
In 2017, the number of prescriptions filled rose 4.3%, up from a 3.8% year-over-year gain in 2016. Same-store prescription count grew 3.8% in 2017, compared with a 3.5% uptick in 2016. Shoppers Drug Mart said the average prescription value in 2017 declined 0.8% versus a decrease of 0.5% for 2016.
Overall retail sales for the 2017 fourth quarter at Loblaw, including its food and drug stores, fell 1.2% to $10.72 billion from $10.85 billion a year earlier. Excluding the consolidation of franchises, retail sales were down 2% year over year, the company said.
Food retail sales came in at $7.55 billion in the quarter, down 3.1% from $7.79 billion a year ago. Same-store sales inched up 0.5%, compared with a 1.1% gain in the prior-year period.
Loblaw’s total retail sales for 2017 edged up 0.6% to $45.63 billion from $45.38 billion in 2016. Food retail sales came in at $33.06 billion for 2017, down about 0.4% from $33.18 billion in the previous year.
For Loblaw’s retail segment, 2017 fourth-quarter operating income was $56 million, compared with $392 million a year earlier. The company noted that the decrease reflects improvements in underlying operating performance of $37 million that were more than offset by the negative impact of items totaling $373 million. Those items included charges related to the launch of the PC Optimum loyalty program — merging the Shoppers Drug Mart and Loblaw loyalty progams — as well as restructuring and other related costs and the negative impact of the Loblaw Card program.
Operating income for fiscal 2017 was $2.25 billion, up from $1.9 billion in 2016.
“We delivered strong results in the fourth quarter and were pleased with our financial performance in 2017,” Loblaw Cos. chairman and chief executive officer Galen Weston said in a statement. “As our company faces exceptional external headwinds in 2018, we are excited about our future and focused on meeting the changing needs of our customers. We remain committed to our financial framework and continued value creation for shareholders.”
On the corporate side, including Loblaw’s financial services and properties business, revenue for the 2017 fourth quarter dipped 0.9% to $11.03 billion from $11.13 billion. Retail sales accounted for 97% of total sales in the quarter.
Fourth-quarter net earnings available to shareholders were $19 million, or 5 cents per diluted share, compared with $201 million, or $50 per diluted share, a year earlier. The result reflected improvements in underlying operating performance of $48 million that were more than offset by the negative impact of adjusted items totaling $230 million (described above).
Adjusted net earnings in the quarter were $441 million, or $1.13 per share, up from $393 million, or 97 cents per share, a year ago. Analysts’ consensus estimate was for adjusted earnings per share 0f $1.12, according to Zacks Investment Research.
Loblaw’s fiscal 2017 net income available to shareholders came in at $1.49 billion, or $3.75 per diluted share, up from $971 million, or $2.37 per diluted share, in 2016. Adjusted earnings per share (EPS) for 2017 were $4.53 versus $4.05 in 2016. On average, analysts projected Loblaw’s 2017 adjusted EPS at $4.52.
For the 12 months through the fourth quarter, Loblaw opened 22 food and drug stores and closed 19 stores, resulting in a 0.1% net increase in retail square footage.
The Loblaw Cos. retail network totaled 2,427 corporate, franchised and associate-owned stores as of the close of fiscal 2017, including nearly 1,093 grocery stores — with more than 500 in-store pharmacies — and 1,334 Shoppers Drug Mart/Pharmaprix drug stores.