Shoppers Drug Mart Financial Analysis Report

4777 words - 19 pages

Shoppers Drug MartFinancial Analysis ReportNames: ____________Date: ____________IntroductionAs of December 31, 2007, Shoppers Drug Mart Corp. (SC.TO) traded at $53.26 per share in the Toronto Stock Exchange. The share's 52-week high was $53.62 while its 52-week low was $53.10. The company had total asset value of $5.644 billion and sales of $8.478 billion in 2007.Company BackgroundShoppers Drug Mart (Shoppers) is a recognized leader in the drugstore and pharmaceutical industry in Canada. Shoppers is the licensor of full-service retail drug stores operating under the name Shoppers Drug Mart (Pharmaprix in Quebec) (Shoppers Annual Information Form, 2007, p.7). First incorporated on November 16th, 1999, the company is now headquartered in Toronto, Ontario. In 2007, the company has a successful year with consolidated sales of approximately $8.5 billion. "As at December 29, 2007 there were 1,057 Shoppers Drug Mart/Pharmaprix retail drug stores owned and operated under license by Associates" (Shoppers Annual Information Form, 2007, p.7). Shoppers' stores are located throughout Canada, with prime locations in each province to provide convenience to customers. In each retail store, there are various everyday products that consumers may purchase conveniently. "Front store merchandise categories include over-the-counter medications, health beauty aids, cosmetics and fragrances (including prestige brands), everyday household needs and seasonal products" (Shoppers Annual Report, 2007, p.8). Shoppers focuses on exceptional merchandising with unique brands, convenience, and value-added services for customers. "The Company also offers a broad range of high-quality private label products under the Life Brand, Quo, Everyday Market, Bio-Life, Navita and Easypix, among others, and value-added services such as the Healthwatch program, which offers patient counselling and advice on medications and disease management, and the Shoppers Optimum program, one of the largest retail loyalty card programs in Canada (Shoppers Annual Report, 2007, p.8). Over the years, Shoppers has been quite successful in various aspects of their stores, such as effective merchandising, marketing, and offering excellent service to pharmacy customers.In addition, Shoppers owns other lines of business. The company also owns 64 Shoppers Home Health Care stores, making it the largest Canadian retailer of home health care products and services, including the sale and service of assisted-living devices, medical equipment, home-care products and durable mobility equipment by sales volume (Shoppers Annual Information Form, 2007, p.7). Finally, Shoppers also owns MediSystem Technologies Inc., a provider of pharmaceutical products and services to long-term care facilities in Ontario and Alberta (Shoppers Annual Report, 2007, p.8).The corporate infrastructure is comprised of Associates in the retail store network. "An Associate is a pharmacist-owner of a corporation that is licensed to operate a retail...

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