Jean Coutu Group (PJC) Inc.'s first-quarter profit fell sharply compared to a year ago when it realized gains from divesting its interest in U.S. drugstore giant Rite Aid.
First-quarter profit was $54.1-million or 29 cents per share, compared with $108.6-million or 51 cents in the year-earlier period.
Longueuil, Que.-based Jean Coutu said the decrease in profit is due to a gain of $54.4-million booked in the first quarter of fiscal 2014.
Analysts had been expecting first-quarter earnings per share of 30 cents.
Profit before gains related to the Rite Aid investment was $54.1-million or 29 cents per share compared with $54.2-million or 26 cents in the year-earlier period.
Revenue increased to $688.6-million, compared with $681.6-million year-over-year, as the company's sales at its Pro Doc Ltd. generic-drug unit rose and the total selling square footage of its stores grew.
But same-store sales – stores open at least one year – rose by a slight 0.1 per cent, down from an increase of 0.6 per cent a year earlier.
Pharmacy sales increased by 0.3 per cent and front-end sales fell by 0.5 per cent, compared with the corresponding period last year.
Jean Coutu president and chief executive officer François Coutu said on a conference call for analysts that the start of summer season was "miserable," with sales of sunscreen and allergy treatments down 11.8 per cent and 17 per cent, respectively.
"But it looks like summer's back and we'll pick it up later on."
A good Easter helped offset poor early-summer performance, he added.
Jean Coutu and other retailers are fighting to hold their own in a brutally competitive retail environment that has seen several major acquisitions and mergers over the past few years.
Loblaw Cos. last year took over Shoppers Drug Mart Corp. in a $12.4-billion deal. Sobeys Inc. has acquired Safeway's Canadian assets.
Jean Coutu has so far remained on the sidelines, although there has been speculation it could do a deal with Quebec grocery giant Metro Inc.
"The results of the first quarter of fiscal 2015 demonstrate the effectiveness of our business plan in spite of a highly competitive market," Mr. Coutu said in a news release Tuesday.
The company's board declared a quarterly dividend of 10 cents per share.