Shoppers Drug Mart reports continued sales, net earnings growth

TORONTO A Toronto-based pharmacy chain reported continued growth in sales and net earnings for its second quarter.

Shoppers Drug Mart said Thursday that its for its second quarter ended June 19, sales increased 5% to $2.3 million (CAD $2.4 million), compared with the year-ago period. Similarly, same-store sales rose 2.7%,

Prescription sales increased 5.1% in the second quarter to $1.13 billion (CAD $1.166 billion) and accounted for 48.5% of the company’s sales. On a same-store basis, prescription sales increased 3.5%. Consistent with trends in recent years, prescription sales growth was driven primarily by strong growth in the number of prescriptions filled, while increased generic utilization continued to have a deflationary impact on sales growth in the category. In the second quarter 2010, generics represented 54.4% of prescriptions dispensed, compared with 52.7% of prescriptions dispensed in the second quarter 2009.

Additionally, front-end store sales increased 4.8% in the second quarter to $1.19 billion (CAD $1.23 billion), with the company continuing to experience sales gains in its core categories. On a same-store basis, front store sales increased 2%.

Shoppers Drug Mart also disclosed that its second-quarter net earnings increased 6.2% to $139.8 million (CAD $145 million) from $131.2 million (CAD $136 million) a year ago. This result was achieved prior to the impact of any proposed and/or announced provincial drug system reform initiatives, some of which came into effect on July 1, Shoppers said.

Meanwhile, the chain also increased its 2010 fiscal year guidance, stating that its diluted earnings per share would be between $2.57 (CAD $2.66) and $2.62 (CAD $2.72).

During the second quarter, 21 drug stores were opened, 13 of which were relocations, and three smaller drug stores were closed.  The company also added one Murale luxury beauty store to its network during the quarter. At quarter-end, there were 1,309 stores in the system, comprised of 1,239 drug stores (1,180 Shoppers Drug Mart/Pharmaprix stores and 59 Shoppers Simply Pharmacy/Pharmaprix Simplement Sante stores), 63 Shoppers Home Health Care stores and seven Murale stores.