Jean Coutu Group profits up nearly C$350 million on sale of Rite Aid shares
LONGUEUIL, Quebec — Canadian retail pharmacy operator the Jean Coutu Group posted big increases in sales and profits that stemmed in large part from its sale earlier this year of much of its stake in U.S. retail pharmacy chain Rite Aid.
Jean Coutu Group reported first quarter 2013 sales of C$681.5 million, compared with C$660.6 million in first quarter 2012. The earnings boost included a C$348 million gain from its April 20 sale of 56 million shares of Rite Aid, including a C$82.8 million gain following the sale and an unrealized gain of C$265.2 million following a change in the company's accounting method due to its loss of significant influence in the U.S. chain.
Other reasons for the boost in sales included overall market growth and an expansion of the PJC network of franchised stores. Profits for the quarter were C$397.4 million, compared with C$49.9 million in first quarter 2012, with the increase coming from the sale of the Rite Aid shares.
"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. "Our network retail sales, and more importantly those of the pharmaceutical section, posted a significant increase despite the price reductions of generic drugs."
As of June 2, the company still owned 178.4 million shares of Rite Aid, equaling a 19.84% stake in the Camp Hill, Pa.-based chain with a value of C$226.2 million.