LONGUEUIL, Que. – Drug store chain franchisor the Jean Coutu Group (TSX:PJC.A) says unusual gains on its Rite Aid holdings as well as improved revenue helped earnings soar eightfold in the company’s fiscal 2013 first quarter.
Quebec-based Jean Coutu said net earnings for the three months ended June 2 amounted to $397.4 million or $1.81 per share. That compared with $49.9 million or 22 cents per share in net profit a year ago.
Revenue in the period rose to $681.5 million from $660.6 million.
The company said disposals of investment in the U.S.-based Rite Aid contributed $82.8 million.
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It also had an unrealized gain related to the investment in Rite Aid of $265.2 million following a change in accounting method due to the corporation’s loss of significant influence in Rite Aid.
“We are very satisfied with the results of the first quarter of fiscal year 2013 which demonstrate the excellent performance of our operations,” president and CEO Francois Coutu said in a statement accompanying the results.
“Our network retail sales, and more particularly those of the pharmaceutical section, posted a significant increase despite the price reductions of generic drugs.”
The company said the 3.2 increase in revenue was attributable to overall market growth and the expansion of its PJC network of franchised stores. That despite the deflationary impact of the introduction of generic versions of some drugs as well as the price reductions of generic drugs previously decreed by the Quebec government.
On a same-store basis, the PJC network’s retail sales grew by 3.4 per cent compared with the year-earlier period, pharmacy sales gained four per cent and front-end sales increased by 2.5 per cent.
Jean Coutu Group operates a network of 400 franchised stores in Quebec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Sante and PJC Sante Beaute, and employs close to 19,000 people. It also owns Pro Doc Ltd., a Quebec-based subsidiary and manufacturer of generic drugs and has an investment in Rite Aid Corp., a company with more than 4,600 drugstores in the United States.
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