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Jean Coutu Q3 sales up 1.7%

BY Michael Johnsen

VARENNES, Québec — The Jean Coutu Group reported Thursday revenues of $530.3 million for the third quarter ended Nov. 28, 2015, up 1.7%.
 
Jean Coutu Group attributed the increase to the overall market growth despite the deflationary impact of generic drugs. Generic drugs reached 69.8% of prescriptions during the third quarter of fiscal year 2016 compared with 68.1% of prescriptions for the comparable period of the previous fiscal year.
 
“We are satisfied with the results of the third quarter of fiscal 2016, which demonstrate the relevance of our strategies and the strength of our organization, despite the restrictive regulatory context which prevails in our industry," stated François Coutu, president and CEO Jean Coutu Group. “In the next few months, we will continue to capitalize on dynamic strategic initiatives to maintain our growth and sustain our leadership.” 
 
On a same-store basis, the Jean Coutu Group network's retail sales increased by 0.1%, pharmacy sales decreased by 1.6% and front-end sales increased by 2.4%, compared with the corresponding period last year. Sales of non-prescription drugs, which represented 9.1% of total retail sales, increased by 3.9% compared with 1.6% for the corresponding period of fiscal year 2015.
 
During the third quarter of fiscal year 2016, there was one franchised store relocated and one store was closed. Also, three stores were significantly renovated or expanded.
 
As at Nov. 28, 2015, total selling square footage of the Jean Coutu Group network amounted to 3.2 million square feet, up 1.6%.
 
 
 
 

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Walgreens’ earnings growth, Rite Aid acquisition ‘on track’ after Q1

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens Boots Alliance on Thursday reported net sales of $29 billion, representing an increase of 48.5%, for the first quarter 2016 that ended Nov. 30, 2015. The significant growth was attributed to the inclusion of Alliance Boots consolidated results, the company reported. 
 
Wall Street had expected $29.2 billion in overall revenue, according to analysts polled by Thomson Reuters. 
 
“The year has started with a comparatively strong first quarter, as we expected," stated Stefano Pessina, executive vice chairman and CEO. "Our ongoing work to control costs across Walgreens Boots Alliance and improve adjusted operating income margins is growing earnings overall. Although it is early in the year, we are on track to deliver against our expectations," he said. “The work to renew and update our businesses, in order to meet the opportunities and challenges of our ever-changing markets, is a core strength that we must embrace as routine across our enterprise. Our ability to deploy tools and strategies that address these dynamics, generating continued growth across Walgreens Boots Alliance, and the commitment I see from our team give me confidence that we will deliver what we have signaled for 2016 and beyond.”
 
The company also noted that its proposed acquisition of Rite Aid is progressing as planned. The transaction, which was announced Oct. 27, is subject to the approval of Rite Aid’s stockholders, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.
 
Rite Aid has scheduled a special meeting of its stockholders for Feb. 4 to, among other things, consider and vote on a proposal to approve the merger plan related to the acquisition. 
 
The Retail Pharmacy USA division, whose principal retail pharmacy brands are Walgreens and Duane Reade, had first quarter total sales of $20.4 billion, an increase of 4.2% over the year-ago quarter. Sales in comparable stores increased 5.8% compared with the same quarter a year ago. 
 
Pharmacy sales, which accounted for 68.4% of division total sales in the quarter, increased 6.7% compared with the same period last year, while comparable pharmacy sales increased 9.3%. The company attributed the increase in pharmacy sales in part to growth in Medicare Part D and an increase in focus on pharmacy customer care. 
 
The division filled 231 million prescriptions (including immunizations) adjusted to 30-day equivalents in the quarter, an increase of 4.1% over last year’s first quarter, while the reported incidence of flu across the U.S. declined 10.7% compared with the year-ago quarter, according to IMS Health. Prescriptions filled in comparable stores increased 4.7% compared with the same quarter last year. 
 
The division’s retail prescription market share on a 30-day adjusted basis in the first quarter increased approximately 20 basis points over the year-ago quarter to 19.2%, as reported by IMS Health. Walgreens’ new U.S. fulfillment agreements with Valeant Pharmaceuticals International, announced on Dec. 15, are expected to enhance the division’s pharmacy market share growth as the agreements are rolled out in calendar 2016.
 
Comparable retail sales decreased 0.6% in the first quarter primarily due to a reduction in unprofitable promotions and the transitioning of seasonal items away from holiday decorations and toward higher quality, giftable items. 
 
The Retail Pharmacy International division, whose principal retail brands are Boots in the U.K., Thailand, Norway, the Republic of Ireland and The Netherlands, Benavides in Mexico and Ahumada in Chile, had first quarter total sales of $3.5 billion. On a pro forma constant currency basis, comparable store sales in the first quarter increased 2.2% compared with the same period a year ago, with particularly strong growth in Mexico and the Republic of Ireland.
 
The Pharmaceutical Wholesale division, which mainly operates under the Alliance Healthcare brand, had first quarter total sales of $5.8 billion. On a pro forma constant currency basis and excluding acquisitions and dispositions, comparable sales increased 3.1% compared with the same period a year ago. Sales growth in the quarter was particularly strong in Norway, while solid growth continued in Germany and Turkey, two of the division’s largest markets.
 
Combined net synergies in the fiscal 2016 first quarter were $288 million. Walgreens Boots Alliance continues to expect to reach at least $1 billion in combined net synergies in fiscal 2016 relating to the strategic combination with Alliance Boots. This excludes the synergy benefits related to the company’s strategic, long-term relationship with AmerisourceBergen, the benefits of refinancing the legacy Alliance Boots indebtedness at a lower cost and the proposed Rite Aid acquisition.
 
Walgreens Boots Alliance is raising by 5 cents per share its low end of guidance for fiscal year 2016 anticipated adjusted net earnings per diluted share attributable to Walgreens Boots Alliance to $4.30 to $4.55.
 
This guidance continues to assume no material accretion from the proposed acquisition of Rite Aid. 

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ICMAD announces 2016 Technical/Regulatory Forum, Young Designers Competition dinner

BY David Salazar

DEER PARK, Ill. — Cosmetic company association Independent Cosmetic Manufacturers and Distributors announced two upcoming events — its 2016 Technical/Regulatory Forum and its 2016 Young Designers Competition. 
 
The forum, which the organization has hosted annually since 2005, is aimed at offering a business-oriented conference as a follow-up to the ICMAD/FDA Cosmetic Regulatory Workshop. The event attracts over 100 industry professionals and will be held on Feb. 17 at Island Hotel Newport Beach, Calif. 
 
The forum will feature the following speakers, and cover such topics as advertising and marketing compliant products, building a U.S. compliant product, complying with California regulations, labeling do’s and don’ts, among others:
 
  • Carl Geffken of Carl Geffken Consultants;
  • Craig Weiss of the Consumer Product Testing Company;
  • David Steinberg of Steinbrg and Associates;
  • Frédéric Lebreux of BIORIUS;
  • Holly Young of H&Y Regulatory Graphics Consultants;
  • Rob Ross-Fichtner of Focal Point Research; and
  • Sharon Blinoff of Locke Lord
The forum will also feature a dinner honoring the winners of its Young Designers Award Competition, which works with art schools across the country to foster new leaders in package design. Participants have two months to design a label and outer packaging for a stock cosmetic bottle, with the top 15 designs from each participating school being judged by a panel of industry professionals in January. 
 
The dinner will honor finalists and will also feature the announcement of the winning submission and a keynote speaker. The dinner takes place Feb. 18 at the Island Hotel Newport Beach from 6 p.m. to 10 p.m. 

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