RBC Analyst : Expect Double-Digit Earnings Growth from Shoppers

Shoppers Drug Mart Corp. (SHDMF.PK) is expected to deliver double-digit earnings growth in the first quarter despite a challenging retail environment, according to RBC Capital Markets analyst, Irene Nattel.

Ms. Nattel said:

Shoppers' performance is anticipated to remain at the leading edge of North American peers.

The company's focus on increased global sourcing and higher private label penetration should serve it well in an environment of slowing consumer spending, and these initiatives along with the stronger Canadian dollar should enable shoppers to protect its margins.

The analyst is forecasting earnings growth of C$0.45 per share (15% growth over last year's quarter) against consensus estimates of C$0.46, same-store sales of 5.5% in prescriptions and 4.75% in the front of the store, which includes beauty and consumer goods. She rates Shoppers a 'top pick' buy with a price target of C$66.

Shoppers Drug Mart reports its first-quarter results today.