TORONTO -- Shoppers Drug Mart's latest quarterly profit of $147 million came in slightly ahead of analyst estimates, as Canada's largest pharmacy chain increased sales by about three per cent over the same time last year.

"We are pleased with our second quarter operating and financial results," Shoppers CEO Domenic Pilla said in a statement Thursday.

"Together with our Associate-owners and their teams at store level, we continue to execute on our strategic priorities and growth initiatives which are driving sales and market share gains in our core health, beauty and convenience categories.

"At the same time, we remain diligent in our efforts to reduce costs and drive efficiencies across the business. Our efforts thus far have us well-positioned heading into the back half of the year in what remains a challenging economic, competitive and regulatory environment."

The Shoppers board and management are supporting a $12.4-billion takeover offer from Loblaw (TSX:L), announced earlier this week.

The friendly deal is expected to allow Canada's largest grocery retailer to own the country's biggest chain of pharmacy stores, with a combined total of about 25 per cent of prescriptions issued each year in the Canadian market.

Shoppers reported Thursday that its net earnings for the period ended June 15 amounted to 73 cents per share -- one cent above a consensus estimate and up 5.8 per cent from 69 cents per share a year-earlier.

Overall sales increased to $2.538 billion, up 3.3 per cent from a year earlier. That includes $1.2 billion of pharmacy sales, up 3.1 per cent from a year earlier.

At Shoppers locations open at least a year, same-store sales were up 2.0 per cent while pharmacy sales were up 1.3 per cent and the number of retail prescriptions increased by 7.0 per cent from the same time last year.

The period spanned a period when a new competitor entered the market -- Minneapolis-based Target Stores, which began opening its first Canadian stores in Ontario in March.

Like Walmart and Costco, two other U.S. based retailers that have been in Canada for years, Target offers a wide range of merchandise including prescription drugs, health and beauty products.