Tough regulatory environ, competition capping Jean Coutu Group growth

LONGUEIL, Québec  - The Jean Coutu Group on Wednesday posted $526.2 million in sales, up 1.8%, for the quarter ended Aug. 29. Overall same-store sales were up 2%, the Canadian retail pharamcy operator reported, with pharmacy comparable sales up 2.5% and front-end same-store sales up 0.4%. Sales of OTC remedies, which represented 8.2% of total retail sales, increased by 1.1%. 

 

“Throughout the second quarter, we have continued to implement our business plan efficiently, which helped us report an increased operating income in spite of a challenging regulatory context and a still highly competitive environment," stated François Coutu, president and CEO. “We remain committed to focus on dynamic strategies in order to meet our objectives and sustain our growth.” 

 

For the first half of fiscal year 2016, revenues amounted to $1.1 billion, representing an increase of 2.6% as compared to the year-ago period. This increase is attributable to the overall market growth and the expansion of the PJC network of franchised stores 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.

 

Over the first half same-store sales were up 2.9%, representing a pharmacy same-store sales increase of 3.3% and a same-store front-end lift of 1.6%. OTC sales represented 8.5% of total retail sales, up 2.8%. 

 

Generic drugs reached 70% of prescriptions during the second quarter of fiscal year 2016 compared with 68.1% of prescriptions for the comparable period of the previous fiscal year. For the second quarter of fiscal year 2016 the introduction of new generic drugs reduced pharmacy’s retail sales growth by 1.2% and price reductions of generic drugs reduced the growth of those sales by another 0.3%.