July 5, 2011 / 11:25 AM / 7 years ago

UPDATE 2-Jean Coutu profit up on non-prescription drug sales

* Revenue up 2.2 pct (Adds details beginning in second paragraph)

TORONTO, July 5 (Reuters) - Canadian pharmacy chain Jean Coutu Group Inc PJCa.TO posted a higher quarterly profit on Tuesday, beating market estimates as it benefited from strong sales of nonprescription drugs and general merchandise.

Sales of nonprescription drugs rose 6.6 percent in the quarter, forming 9 percent of total retail sales.

Earnings for the first quarter that ended May 28 rose to C$49.9 million ($52 million), or 22 Canadian cents a share, from C$43.9 million, or 19 Canadian cents a share, a year earlier. Revenue rose 2.2 percent to C$660.6 million.

Analysts on average were looking for earnings of 20 Canadian cents on revenue of C$666.1 million, according to Thomson Reuters I/B/E/S.

The stronger earnings came despite drugstore chains being hit by provincial government regulations that have lowered the prices of generic drugs. The regulatory changes began in Ontario last year and spread to Quebec.

The Longueuil, Quebec-based company has been selling more generic drugs than it did a year ago. About 56.5 percent of drugs prescribed in the last 12 months were generic versions, compared with 51.4 percent a year ago.

Jean Coutu, whose rivals include Shoppers Drug Mart-owned SC.TO Pharmaprix, runs nearly 400 drugstores in Quebec, New Brunswick and Ontario under such banners as Jean Coutu, Clinique, Sante and Sante Beaute.

Its retail sales grew about 3 percent, helped by a 3.4 percent rise in sales of food and other non-pharmacy items. ($1=$0.96 Canadian) (Reporting by S. John Tilak; Editing by Derek Caney and Maureen Bavdek)

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