Monday, October 06, 2008

Jean Coutu Group Reports Net Loss on Rite Aid Stake

From Bloomberg:
Jean Coutu Group Inc., the Canadian drugstore chain that owns about a third of Rite Aid Corp., reported a second-quarter loss because of its stake in the money-losing U.S. pharmacy chain. Sales missed analysts' estimate as consumers slowed spending.

The net loss was C$39.1 million ($36 million), or 16 cents a share, compared with net income of C$8.3 million, or 3 cents, a year earlier, the Longueuil, Quebec-based company said today in a statement.

Rite Aid reported Sept. 25 that its second-quarter loss more than doubled to $222 million, or 27 cents a share, because of declining sales and higher financing costs. It was Rite Aid's fifth straight unprofitable quarter. Canadian accounting rules require Jean Coutu to include results from its 30 percent stake in Rite Aid in its financial statements.

``Rite Aid is still a bit of an albatross, even though it's only worth about 10 to 12 percent of the stock,'' David Hartley, an analyst with BMO Capital Markets, said in a telephone interview. ...more

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