Shoppers Drug profit lifted by non-pharma sales – Dominion Lending Centres Clearlease

Shoppers Drug profit lifted by non-pharma sales - Dominion Lending Centres Clearlease

VANCOUVER, BRITISH COLUMBIA – (April 28, 2011) Clearlease Reports Shoppers Drug Mart Corp , Canada’s biggest drugstore chain, posted a higher quarterly profit on Wednesday, helped by robust sales of non-pharmacy items.

The strength in front-store sales, a term pharmacy chains use to refer to food, drink and beauty items, overshadowed a prolonged slump in Shoppers’ prescription drug sales, which have been hit by government regulatory moves.

The results show the company stole some market share for health, beauty and convenience products from grocers and other retailers in the quarter by offering discounts. Front-store sales rose 6 percent.

“The sales are driven by promotions,” Edward Jones analyst Brian Yarbrough said. “It’s great to get the sales number, but it is weighing on profits.”

“They’re definitely gaining some share because you’re not seeing those sorts of comps from the grocery guys,” he said.

Metro Inc , the first of Canada’s big three grocers to report results for the first quarter, last week noted “the difficult competitive environment” as its revenue dropped marginally and same-store sales rose 0.2 percent.

Sales at Shoppers Drug stores open for at least a year, a key measure for retailers, rose 2 percent in the first quarter.

But prescription sales, down 0.4 percent in the quarter, have taken a hit since the Ontario government last year instituted reforms that cut the prices of generic drugs in the province, the biggest market for Shoppers.

Shoppers, without a permanent chief executive since Jurgen Schreiber left in February, said Holger Kluge will succeed David Williams as the board’s nonexecutive chairman. Williams is the interim CEO.

Kluge, who joined the board in 2006, has served as chair of the audit committee since May 2006.

Earnings for the first quarter rose to C$118 million ($123 million), or 54 Canadian cents a share, compared with adjusted earnings of C$114 million, or 52 Canadian cents, a year earlier.

Sales rose 2.7 percent to C$2.35 billion, missing the average analyst estimate of C$2.38 billion, according to Thomson Reuters I/B/E/S.

Shares of Shoppers, whose rivals include Jean Coutu Group Inc and Katz Group’s Rexall and PharmaPlus chains, were down 1 percent at C$40.97 on Wednesday afternoon on the Toronto Stock Exchange.

The stock is up 2 percent since the start of the year, compared with a 4 percent rise in the S&P/TSE Canadian Consumer Staples index.

($1=$0.96 Canadian)

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Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.

Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.

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Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
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