Jean Coutu posts year-end revenue gains of 1.5% to $2.3 billion

VARENNES, Québec - The Jean Coutu Group on Wednesday reported a revenue decline of 1% to $561 million for the quarter ended Feb. 27, 2016. The reduction is attributed to the decrease in sales of non-prescription drugs for cold and flu, the company reported. 

 

“During the fourth quarter, we began the transfer of our operations from our distribution center and head office to their new location in Varennes. We expect to complete the transfer by the end of the summer. The quarter’s results were affected by the costs related to this gradual transition during this period," noted François Coutu, president and CEO Jean Coutu Group. "During the upcoming year, we will continue to implement our strategic plan and will make every effort to pursue our growth.” 

 

For fiscal year 2016, revenues amounted to $2.3 billion, representing an increase of 1.5% due to the overall market growth despite the deflationary impact on revenues of the volume increase in prescriptions of generic drugs compared with brand name  drugs as well as the price reductions of generic drugs.

 

Fourth quarter same-store sales across the PJC network's retail base increased by 0.3%, with pharmacy sales falling by 0.3% and front-end sales increasing by 0.9%. Sales of non-prescription drugs, which represented 9% of total retail sales, decreased by 2.6% compared with an increase of 4.2% for the corresponding period of fiscal year 2015.

 

For fiscal year 2016, on a same-store basis, the PJC network's retail sales grew by 1.5%. Pharmacy sales increased by 1.2% and front-end sales increased by 1.6%. Sales on nonprescription drugs, which represented 8.7% of total retail sales, increased by 1.6% compared with 1.7% for fiscal year 2015.

 

Generic drugs reached 70.3% of prescriptions during the fourth quarter of fiscal year 2016 compared with 68.5% of prescriptions for the comparable period of the previous fiscal year. The increase in the number of generic drugs prescriptions with lower selling prices than brand name drugs had a deflationary impact on the pharmacy’s retail sales.

 

For the fourth quarter of fiscal year 2016 the introduction of new generic drugs reduced pharmacy’s retail sales growth by 0.4%. Furthermore, price reductions of generic drugs reduced retail sales growth by 0.3% and the periodic deductions agreed upon between the Ministry of Health and Social Services and the "Association québécoise des pharmaciens propriétaires" (AQPP) reduced the growth of those sales by an additional 1.6%.

 

The growth in number of prescriptions of 3.2% during this period exceeded the growth of pharmacy's retail sales.