* Q4 EPS C$0.85 vs C$0.82 year earlier
* Earnings top analyst estimates
* Sales rise 4.4 percent to C$2.72 billion
* Same-store sales up 2.7 percent
* Shares rise 1.7 pct on Toronto Stock Exchange
TORONTO, Feb 7 Shoppers Drug Mart Corp,
Canada's leading pharmacy chain, reported a solid fourth-quarter
sales increase on Thursday and profit that slightly exceeded
expectations, sending its shares higher.
Sales at established stores, an important measure for
retailers, rose 2.7 percent in the fourth quarter ended Dec. 29.
Pharmacy sales rose 3.7 percent to C$1.22 billion as the chain
filled more prescriptions, though pharmacy margins fell and
overall profit was little changed from the year-earlier quarter.
Margins on prescription drugs took a hit from a regulatory
drive across Canada to cut the cost of generic drugs. Higher
operating costs, which the company said were related to growth
initiatives, also held back earnings.
Growth at Shoppers and at rivals like Quebec's Jean Coutu
Group Inc has been held back in recent years by the
generic drug initiatives, and more pressure is on the horizon in
Canada, where generic prices are among the highest in the world.
In January, a group of Canadian provinces and territories
agreed to cap the prices of six widely-prescribed generic drugs
at 18 percent of their brand-name equivalents by April 1.
Current caps range from 25 and 40 percent.
At the time, Saskatchewan Premier Brad Wall told Reuters
that more could be done to cut the cost of generics, and said
policymakers would discuss next steps in the spring.
Shoppers Drug's profit dipped to C$175 million ($176
million), or 85 Canadian cents a share, in the fourth quarter,
from C$176 million, or 82 Canadian cents.
Buybacks have boosted earnings per share, and on Thursday
Shoppers said it had renewed its share repurchase program. It
will buy up to 10.2 million shares, or 5 percent of shares
outstanding, by Feb. 14, 2014. Under the current program, the
company has purchased 8.3 million common shares.
Analysts, on average, had expected earnings of 84 Canadian
cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 4.4 percent to C$2.72 billion, above the average
estimate of C$2.67 billion.
Shares rose 1.7 percent to C$42.35 in early trading on the
Toronto Stock Exchange.