Shoppers Drug Mart profit slips 3.4% on takeover costs

Shoppers Drug Mart Corp. reported its fourth-quarter profit slipped to $169 million compared with a year ago as sales crept higher.

Same store sales up as it girds for battle with Target, Wal-Mart

Shoppers Drug Mart says same-store sales were up 1.2 per cent. (CBC)

Shoppers Drug Mart Corp. reported Thursday its fourth-quarter profit slipped 3.4 per cent to $169 million compared with a year ago as sales crept higher.

The pharmacy chain, which continues to operate independently pending a takeover by Loblaw, said the profit amounted to 85 cents per share for the quarter compared with $175 million or 85 cents per share a year ago.

Excluding costs related to Loblaw's $12.4-billion deal to buy the company, Shoppers said it earned $172 million or 86 cents per share.

Analysts had expected earnings of 86 cents per share of earnings under both measures.

Revenue for the quarter that ended Dec. 28 totalled $2.747 billion, up from $2.72 billion a year earlier. Same-store sales were up 1.2 per cent, with revenue from the front of the store (merchandise and non-prescription drugs) marking the biggest jump.

The number of prescriptions filled was up, but the dollar value of the drugs prescribed fell, for an increase of 0.8 per cent, Shoppers reported.

The results included a period of ice storms and power outages in Ontario, where Shoppers has its main retail base.

Shoppers and other retailers also faced increased competition as Target Corp. began its Canadian expansion — one of the factors underlying Loblaw's expansion in the pharmacy sector.

"By any measure, our performance in the fourth quarter of 2013 is a successful conclusion to what has been a very successful year for our company and its shareholders," said Shoppers president and CEO Domenic Pilla.

"While the (Loblaw takeover) transaction must still be reviewed and approved by the Competition Bureau, we look forward to the conclusion of this process and the resultant combination of Canada's leading food and pharmacy retailers."