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Jean Coutu Group profits up nearly C$350 million on sale of Rite Aid shares

BY Alaric DeArment

LONGUEUIL, Quebec — Canadian retail pharmacy operator the Jean Coutu Group posted big increases in sales and profits that stemmed in large part from its sale earlier this year of much of its stake in U.S. retail pharmacy chain Rite Aid.

Jean Coutu Group reported first quarter 2013 sales of C$681.5 million, compared with C$660.6 million in first quarter 2012. The earnings boost included a C$348 million gain from its April 20 sale of 56 million shares of Rite Aid, including a C$82.8 million gain following the sale and an unrealized gain of C$265.2 million following a change in the company’s accounting method due to its loss of significant influence in the U.S. chain.

Other reasons for the boost in sales included overall market growth and an expansion of the PJC network of franchised stores. Profits for the quarter were C$397.4 million, compared with C$49.9 million in first quarter 2012, with the increase coming from the sale of the Rite Aid shares.

"We are very satisfied with the results of the first quarter of fiscal year 2013, which demonstrate the excellent performance of our operations," president and CEO Francois Coutu said. "Our network retail sales, and more importantly those of the pharmaceutical section, posted a significant increase despite the price reductions of generic drugs."

As of June 2, the company still owned 178.4 million shares of Rite Aid, equaling a 19.84% stake in the Camp Hill, Pa.-based chain with a value of C$226.2 million.

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BTS season will boost retail sales, foot traffic in August

BY Allison Cerra

CHICAGO — Retail sales and foot traffic will see a boost in late summer as the back-to-school season looms, according to the latest ShopperTrak report.

After a sharp decline in 2009, year-over-year back-to-school sales improved only 1.8% in 2010 before increasing 4.5% in 2011, ShopperTrak noted. Year-over-year retail foot traffic percentages also have declined during the past four back-to-school shopping seasons. When compared with the same period last year, however, 2012 sales will rise 4% in August, and retail foot traffic will increase 1.5%.

"This is an important shopping period, and retailers have struggled during back-to-school seasons the past few years," ShopperTrak founder Bill Martin said. "The tide will turn for retailers this year as we forecast a 4% increase in back-to-school sales. This increase will follow year-over-year U.S. retail sales growth in 28 of the last 29 months. August will present retailers with a tremendous opportunity to take all steps possible to maximize their shopper opportunity and increase conversion rates."

ShopperTrak also said that falling gas prices in recent weeks may encourage customers to make more car trips and visit more stores than they did last year, while lower prices at the pump also may translate into additional disposable income that parents can spend on their children.

"For the last couple of years, traffic data indicated a trend toward very targeted shopping. This year, back-to-school shoppers will visit more stores and browse for the best value," Martin added. "Stores that plan ahead and keep a close eye on their foot traffic and conversion rates will be pleased with their performance this season. Those who depend on last year’s shopper turnout and behavior as a guide for their staffing and inventory plans are, however, at risk of losing out on business this year."

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SXC Health Solutions changes name to Catamaran

BY Alaric DeArment

LISLE, Ill. — Pharmacy benefit manager SXC Health Solutions has picked a new name following its recent merger with another PBM, the company said.

SXC, which recently merged with Catalyst Health Solutions to become the country’s fourth-largest PBM by prescription volume, said it has changed its name to Catamaran. The company’s shares will be traded under the ticker CTRX on the Nasdaq and as CCT on the Toronto Stock Exchange starting Wednesday. The company said the new name would reflect its "nimble, flexible" approach to serving clients.

"Catamaran is the most viable alternative for organizations who are struggling to solve the healthcare cost challenge, and we’re eager to put our enhanced resources to work for them," Catamaran chairman and CEO Mark Thierer said. "We have the skill and scale to deliver compelling financial results and the clinical intelligence to deliver sustainable improvements in the health of members."

The merged company expects annual revenues of $13 billion, which it said would place it among the top 25 companies in the country and among the top 15 in the Chicago metropolitan area. The company will serve 25 million members and will have an annual volume of more than 200 million adjusted pharmacy benefits management prescriptions. Thierer will serve as the company’s chairman and CEO, while Jeff Park will serve as its EVP and CFO, and former Catalyst president and COO Rick Bates will serve as EVP market segments. Former Catalyst chairman and CEO David Blair will provide ongoing support to the combined company and ensure a "seamless and successful" integration.


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