Jean Coutu misses profit expectations, boosts dividend

Wed May 1, 2013 8:12am EDT
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(Reuters) - Canadian pharmacy chain Jean Coutu Group Inc's (PJCa.TO: Quote) fourth-quarter profit missed analysts' expectations as tighter price controls for generic drugs hit revenue.

Price controls have crimped prescription sales growth at Jean Coutu Group and rivals such as Shoppers Drug Mart SC.TO in recent years. Increasing use of generic drugs has also exacerbated the impact of lower prices.

The company, however, raised its quarterly dividend by 21.4 percent to 8.5 Canadian cents per share.

Excluding a gain related to Jean Coutu's stake in U.S. drugstore chain Rite Aid Corp (RAD.N: Quote) and other one-time items, Jean Coutu earned 25 Canadian cents per share for the quarter.

Analysts on average expected the company to earn 26 Canadian cents per share, according to Thomson Reuters I/B/E/S.

The company said 63.2 percent of prescriptions were for generics during its fourth quarter, up from 57.4 percent in the same quarter last year.

Total sales fell to C$682.7 million. Same-store sales, however, were up 0.5 percent. Year-ago numbers were benefited by the presence of an additional reporting week.

Pharmacy same-store sales fell 0.1 percent while that of non-pharmacy, or "front-end" goods that include food and cosmetics, rose 1.3 percent.

Net profit declined to C$53.6 million ($53.3 million), or 25 Canadian cents a share, from C$62 million, or 28 Canadian cents per share, a year earlier.   Continued...

A pedestrian walks past a Jean Coutu pharmacy in downtown Montreal, April 28, 2010. REUTERS/Shaun Best