Shoppers Drug Mart said new store space and effective marketing efforts helped drive solid revenue, same-store and earnings gains in the third quarter.
Rising prescription drug and front-end sales helped boost total revenue nearly 8% in the period, according to the retailer. "We are pleased with our third-quarter results and our performance thus far in 2009, as we continue to deliver growth in these challenging economic times," CEO Jürgen Schreiber commented.
TORONTO — Shoppers Drug Mart said store growth and effective marketing efforts helped drive solid revenue, same-store and earnings gains in the third quarter.
For the 16 weeks ended October 10, total sales climbed 7.9% year over year to $3.01 billion (Canadian), Shoppers Drug Mart said, noting that it saw robust sales growth in all regions of the country.
Prescription sales in the quarter rose 9.7% to $1.48 billion, while front-of-store sales were up 6.2% to $1.53 billion.
The retailer said its capital investment program, which increased drug store selling space 11.6% year over year to 11.6 million square feet, continues to spur sales growth, along with successful marketing campaigns combined with promotions tied to the Shoppers Optimum loyalty card program.
Same-store sales (excluding tobacco products) increased 4.8% in the third quarter, including a 5.8% gain in the pharmacy and a 3.9% uptick in the front end. SDM said strong growth in the number of prescriptions filled helped propel results in the pharmacy, and higher generic utilization had a negative impact.
Third-quarter net earnings, meanwhile, rose 6.6% to $171 million, or 79 cents per diluted share, from $160 million, or 74 cents per diluted share, a year earlier. SDM attributed the gain to strong sales growth, improved purchasing synergies and its ongoing cost reduction, productivity and efficiency initiatives. Increased amortization, higher expenses associated with the expansion of the store network, and stepped-up investments in pricing and promotions curbed earnings gains, the company added.
"We are pleased with our third-quarter results and our performance thus far in 2009, as we continue to deliver growth in these challenging economic times," president and chief executive officer Jürgen Schreiber said in a statement. "The strength of our pharmacy programs and services, combined with effective front-store merchandising and marketing initiatives, have us well-positioned heading into the holiday season and the final weeks of 2009.”
During the third quarter, SDM opened or acquired 37 drug stores, 15 of which were relocations, and one smaller drug store was closed. The company also added two Murale luxury beauty stores.
As of October 10, SDM had 1,282 stores in its network, including 1,212 drug stores (1,170 Shoppers Drug Mart/Pharmaprix stores and 42 Shoppers Simply Pharmacy/Pharmaprix Simplement Santé stores), 66 Shoppers Home Health Care stores and four Murale stores.