China Nepstar turns from loss to profit

NYSE-listed pharmaceutical retailer China Nepstar Chain Drugstore says increased staff training and promotional activity fuelled a 12.9 per cent rise in sales in the latest quarter.

In the three months to June 30, China Nepstar achieved US$125 million in sales, with same store sale up 16.7 per cent year on year. The company reported a net income of $1.4 million compared to a net loss of $2.5 million last year.

CEO Rebecca Zhang said the same-store-sales growth had accelerated during the quarter due to higher store traffic as a result of effective promotions on pharmaceutical products and professional store service training.

“While we focus on productivity at the store level, we also managed to achieve better operational efficiency by reducing our general and administrative expenses and constantly optimising our store management,” she said.

During the second quarter of 2015, the company opened 38 stores and closed 59. As of June 30, it had 1948 directly operated stores in total.

China Nepstar had a portfolio of 2155 private label products at the end of June 30, which now account for 14.7 per cent of its revenue and 22 per cent of gross profit.

“As we gradually achieve recovery in growth on profit, we will focus on accelerating our organic revenue growth by fine-tuning our store management system and improving our store image to customers,” Zhang said of the business’ outlook.