Durrant Pate/Contributor

Pharmaceutical chain, Fontana delivered improved financial results for its second quarter, which was severely impacted by Hurricane Melissa, one of the most powerful hurricanes on global record and the first Category 5 to ever hit Jamaica. 

The hurricane significantly affected Fontana’s business operations across the island, particularly in the west, with the disruptions resulting in the second quarter ended December 31, 2025, performance being below initial projections. However, Fontana delivered 5.6% year-over-year revenue growth totalling $2.9 billion, up from the $2.7 billion booked a year ago. 

The quarter was materially affected by a 16- day closure of Fontana’s second-largest location by sales, reduced trading hours across all western region stores, and a temporary disruption to its Montego Bay corporate offices. Notwithstanding these challenges, the company achieved topline growth, underscoring the strength of its brand, diversified network, customer loyalty, and the contribution from the recently acquired Monarch locations. 

Overcoming Hurricane Melissa challenges

Chief Executive Officer, Anne Chang commented, “Hurricane Melissa was a significant external event that temporarily disrupted our western operations. Our priority in the aftermath was ensuring the safety of our team members and supporting the communities we serve. Despite these challenges, we delivered revenue growth year-over-year – a clear demonstration of the resilience of our brand and operating platform. 

She pointed to the expanded network, saying, “disciplined execution, and customer loyalty remain core strengths. As operations normalise, we are confident in our ability to strengthen margins and sustain long-term growth.” While second-quarter profitability was temporarily affected by external disruption, underlying demand trends remain healthy. 

With western operations now normalised and trading hours restored, the company anticipates a return to stronger profitability trends in the second half of the financial year. With these normalised operations, continued integration progress, and disciplined cost management, Fontana enters the second half of the financial year positioned for improved margin performance and sustained growth.

Profitability slightly up over 2025

Gross profit for the review quarter increased 2.8% to $1.1 billion, with gross margin moderating to 38.2%, down from 39.2% in 2025. Margin compression primarily reflects lower sales volumes from higher-contribution western locations, operating inefficiencies associated with shorter opening hours, logistics challenges in rebalancing inventory across the network, and targeted team member and community support initiatives. 

Operating expenses rose 22.2% to $840.8 million, up from $687.9 million in 2025. The increase was primarily driven by fixed cost absorption during the 16-day store closure, reduced operating leverage during shortened trading hours, integration costs for four Monarch locations as well as set-up costs for three new Ora concept stores.

Importantly, a portion of these expenses relates to strategic expansion and integration activities that position the company for future growth, as the locations continue to mature and scale. Operating profit totalled $252.2 million, a 32.8% decline versus the prior year, directly attributable to storm-related interruptions.

Net profit and EBITA down

On the negative side, net profit for the quarter contracted to $201 million, down 38.7% year-over-year, after recording a tax provision of $29.5 million. Earnings per share (EPS) is down to $0.16 compared to $0.26 in Q2 of 2025.

Earnings before interest, taxes and amortisation (EBITA), which is a financial metric measuring a company’s operating profitability, declined 17.4% to $523.3 million, compared to $633.5 million in 2025. Excluding the temporary disruption and shortened trading hours, underlying earnings capacity remains strong. 

Finance costs increased 72.4%, reflecting borrowings associated with recent acquisitions and strategic expansion initiatives, while other income rose 19.6% to $52 million. Fontana exited the quarter with a strengthened balance sheet and significant financial flexibility. 

Total assets amounted to $7.2 billion, up 25.9% year-over-year, while cash and cash equivalents jumped to $2.0 billion, a 23.9% increase over 2025. Shareholders’ equity closed the quarter at $3.1 billion, up 4.6%.

Asset growth reflects continued investment in fixed assets, increased inventory to support network expansion, and goodwill arising from the Monarch acquisition. 

Fontana’s strong cash position provides resilience and supports ongoing strategic initiatives, including network expansion and integration optimisation. The integration of the four Monarch locations and the continued rollout of the Ora by Fontana concept contributed positively to revenue growth during the quarter. 

As these locations mature and operational efficiencies are realised, management expects improved margin performance and stronger operating leverage.