February 12, 2009 / 5:34 PM / 10 years ago

UPDATE 2-Shoppers Drug Mart profit jumps, sees strong '09

* Fourth-quarter EPS C$0.80 vs C$0.70

* Revenue up 14.7 percent

* Sees 2009 sales growth of 7.5-9 percent

* Shares rise 5.5 percent to C$43.82 (Adds details, analyst quotes, updates shares)

TORONTO, Feb 12 (Reuters) - Shoppers Drug Mart SC.TO reported a 14.4 percent jump in quarterly profit on Thursday, helped by strong pharmacy and front-of-store sales, and said it saw sales rising through 2009, despite the slowing economy.

Canada’s biggest pharmacy chain said it earned C$173.1 million ($138.8 million), or 80 Canadian cents a share, in its fourth quarter, up from C$151.3 million, or 70 Canadian cents a share, a year earlier.

Revenue grew 14.7 percent to C$2.5 billion.

Analysts had expected average earnings per share of 75 Canadian cents, before items, and revenue of C$2.495 billion, according to Reuters Estimates.

“The quarter was driven by strong sales in the pharmacy, but good results in the front end as well,” said Brian Yarbrough, an analyst at Edward Jones in St. Louis, Missouri. “This is a very good, proven model that works well in recessionary-type environments.”

Shoppers said it had strong sales growth across the country, and made gains in all of its product categories except tobacco, which is being phased out of stores in Western Canada that still carry tobacco products.

Same-store sales, excluding tobacco, rose 3.6 percent.

Prescription drug sales on a same-store basis rose 5 percent. Total prescription sales climbed 18.3 percent to C$1.15 billion, accounting for 46.2 percent of the company’s sales mix, up from 45 percent last year.

Front-of-store sales, including products such as cosmetics, candy bars and over-the-counter medications, rose 12.5 percent to C$1.34 billion, excluding tobacco, on a same-store basis.

Shoppers has fared better than most of its competition as retailers struggle with the impact of slumping consumer confidence and spending, while the economy buckles under the weight of the recession.

For all of 2009, the company forecasts sales growth of approximately 7.5 percent to 9 percent on a year-over-year basis, underpinned by same-store sales growth of between 5 percent and 6 in pharmacy, and front-of-store sales growth of a moderate 2.4 percent.

Shoppers opened or bought 28 drug stores in the quarter, ended Jan. 3, including seven relocations. At the end of the quarter, the company had 1,217 stores, consisting of 1,149 drug stores and 66 Shoppers Home Health Care stores, which supply medical equipment and devices, and two Murale stores, a stand-alone luxury beauty brand it opened last year.

Shoppers shares were up 5.9 percent at C$44.01 on the Toronto Stock Exchange at midday.

$1=$1.24 Canadian Reporting by Scott Anderson; editing by Rob Wilson

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