The Jean Coutu Group reports loss for Q3 2008

LONGUEUIL, Quebec The Jean Coutu Group on Thursday reported a net loss of $333 million for the third quarter ended Nov. 29, primarily due to a preliminary provision of $298.4 million related to its investment in Rite Aid, the company released in a statement today.

“As a result of the deterioration of the economic environment in the United States, combined with the severity of the decline in the trading value of Rite Aid common shares for an extended period, the company anticipates performing, during the fourth quarter, a comprehensive analysis related to its investment in Rite Aid,” the Canadian drug store said.

“As required by accounting standards, [the Jean Coutu Group] has recorded in the third quarter a preliminary provision against the carrying value of its investment in Rite Aid following the decline in the trading value of its common share for an extended period,” stated Francois Coutu, president and chief executive officer of Jean Coutu. “Rite Aid’s recently published financial results indicate however an increase of its adjusted EBITDA as well as improved cost controls,” he said. "Our Canadian network performance during the third quarter was satisfactory. We pursued our growth objective and continued to invest in the PJC drugstore network. We are on our way to achieving significant growth in network selling square footage in fiscal 2009 and increase our leadership in our markets.”

In addition to the preliminary provision, Jean Coutu recorded a loss of $61.6 million as part of its share of Rite Aid’s loss during the third quarter of fiscal 2009.

During the third quarter, the company’s Canadian franchise network showed a 5 percent increase in total retail sales compared with last year’s comparable period. Network retail sales were up 3.2 percent, pharmacy sales gained 4.5 percent and front-end sales increased 1.6 percent year-over-year in terms of comparable stores. Retail sales for the period amounted to $709 million.