Jean Coutu Group: 'Good' Q2 results, eyes promotions and private label to further drive sales

LONGUEUIL, Quebec — Facing a competitive landscape, Canada’s Jean Coutu Group is ramping up promotional activity and working to build loyalty among younger beauty shoppers with its private-label brand.



“A good quarter, second quarter of fiscal 2015, in spite of the restrictive regulatory context in an environment that is [increasingly] competitive,” Francois Coutu, president and CEO of the Jean Coutu Group, told analysts during its second quarter conference call Wednesday morning.



In light of the rise in promotional activity among competitors, the Jean Coutu Group launched two promotions during the quarter and also launched a health-related initiative to help shoppers remain healthier during travel.



“We launched various dynamic programs, including two Super Weekends in May and August, where many door-crasher prices were announced,” said Coutu. “Increases in sales were significant during these two weekends. We also launched various content, which proved to be very popular with our clients.”

In addition, the company announced late last month a five-year partnership with the three Dufour-Lapointe sisters — Maxime, Chloé and Justine — to be the new ambassadors of its Personnelle Cosmetics private-label brand. As previously reported by Drug Store News, the partnership marks the first time the retailer has associated its private-label brand with a public figure.



“The three sisters are young, they are bright, they are healthy and a good image for our youngsters. We want to make sure that the young generation uses Personnelle brand, and that is something that we needed to work on,” Coutu told analysts. “With the three sisters, I think we make some strides there, definitely.”



To help shoppers stay healthy during travel, the retailer distributed free health travel kits to customers, which included information on how to stay healthy while traveling. The company distributed more than 20,000 of the kits to shoppers.



During the quarter, revenues climbed 3.2% to $674.4 million Canadian dollars. The company attributed the increase to overall market growth and the expansion of the PJC network of franchised store, despite the deflationary impact on revenues of the volume increase in prescriptions of generic drugs compared with brand name drugs, as well as the price reductions of generic drugs.



Net profit per share gains related to the investment in Rite Aid amounted to 28 Canadian cents during the quarter compared with 24 Canadian cents in the year-ago period, a 16.7% increase.



The Jean Coutu Group operates a network of 416 franchised stores under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PC Santé Beauté. The PJC network’s retail sales, on a same-store basis, increased 2.4%. Pharmacy sales on a comp basis increased 2.7%, while the front end rose 1.6%.