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Shoppers Drug Mart posts Q1 results

Front-end same-store sales increased 2%

TORONTO — Canadian pharmacy retailer Shoppers Drug Mart announced on Thursday a boost in first-quarter sales and earnings, driven, in part, by gains at the front end.

“We are encouraged by our first-quarter operating and financial results. This is a solid performance and a good start to the year in what remains a challenging economic and regulatory environment,” stated Domenic Pilla, president and CEO. “Together with our associate owners and their teams at store level, we continue to work through the impact of regulatory reforms on our business, while never comprising on our commitment to providing the best in patient care and customer service.”

First-quarter sales totaled C$2.39 billion, up 2% compared with the year-ago period. Same-store sales rose 1.5%.

Pharmacy sales were C$1.17 billion in the first quarter, an increase of 1.6% compared with the same period last year, as growth in the number of prescriptions filled continues to be partially offset by a reduction in average prescription value. On a same-store basis, prescription sales rose 1.1% during the quarter.

The company stated that the decrease in average prescription value can be largely attributed to a reduction in generic prescription reimbursement rates, the result of recently implemented and ongoing drug system reform initiatives in certain jurisdictions of Canada, along with increasing generic prescription utilization rates.

At the front end, sales were C$1.23 billion, up 2.5%. The increase was led by strong sales gains in cosmetics and convenience categories, notably food and confection. Shoppers noted that its store network development program, which resulted in a 4.2% increase in selling space compared with a year ago, also was a contributing factor to sales growth in the front of the store. Front-end same-store sales increased 2%.

Net earnings for the quarter totaled C$119 million compared with C$118 million in the year-ago period. On a fully diluted basis, net earnings per share were 56 Canadian cents, compared with 54 Canadian cents in the year-ago period.

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