Fontana posts first profit gain since Hurricane Melissa

Fontana Ltd, which operates a chain of pharmacies, has returned to higher profit following the fallout from Hurricane Melissa. 

Net profit for the third quarter rose 11 per cent to $114.1 million from $102.8 million in the comparable period a year earlier, as revenue climbed 17.7 per cent to $2.6 billion from $2.2 billion, driven by same-store sales growth, increased customer traffic and the contribution of four newly integrated Monarch Pharmacy locations — bringing the company's total store count to 11.

"As the company enters the final quarter of the financial year, management remains encouraged by the continued recovery in consumer demand, improving operational efficiencies and the strong long-term prospects of the expanded Fontana network," said chairman Kevin O'Brien Chang and CEO Anne Chang in a joint statement prefacing the results.

Fontana's performance offers a window into the resilience of retail trade amid reduced disposable income in certain market segments. The company's revenue tends to grow at a faster pace than the broader market, while its profit trajectory reflects the discipline of cost management.

Hurricane Melissa struck Jamaica in October 2025, falling within Fontana's second quarter ending December 2025 — a period when disruption to the economy, supply chains and consumer activity weighed heavily on the retail sector. Fontana's December quarter profit fell to $201 million from $327 million a year earlier. The March quarter marks the first period in which profit has returned above prior-year levels.

"The third quarter represented a defining period of resilience and recovery for Fontana following the widespread disruption caused by Hurricane Melissa," the board said. "While Jamaica continued to confront the significant economic and social impact of the catastrophe, Fontana remained focused on serving customers, restoring operations and advancing its long-term strategic objectives."

Gross profit grew 16.2 per cent to $971 million, with the company maintaining a gross margin of 36.9 per cent, a performance the board attributed to disciplined merchandising and pricing strategy. Operating expenses rose 18.2 per cent to $812.8 million from $687.7 million, driven by higher staff costs and one-time integration charges related to the Monarch acquisition, though operating profit nonetheless increased 6.8 per cent to $158.2 million.

"The company is also achieving stronger operational alignment across these locations," the board stated. "These trends reinforce management's confidence in the long-term value and earnings potential of the acquisition."

The company ended the quarter with total assets of $6.6 billion, shareholders' equity of $3.2 billion — up 4.8 per cent year-over-year — and cash and cash equivalents of $1.5 billion.

business@gleanerjm.com