The Sigma Healthcare Ltd (ASX: SIG) share price is having a strong start to the week.

In afternoon trade, the pharmacy chain operator and wholesaler's shares are up 12% to $3.02.

This follows the release of a strong update from Chemist Warehouse, which Sigma is aiming to merge with next month.

Sigma share price jumps on Chemist Warehouse update

This morning, Sigma released an update on Chemist Warehouse's performance during the first half of FY 2025. As you might have guessed from the share price reaction, it was a very impressive update.

According to the release, Chemist Warehouse delivered a 13% increase in total sales to a record of $5,154 million. This reflects like for like sales growth of 10.3% and the opening of new stores.

The company opened 19 new stores in the half with two new stores opening in Dubai. It notes that this a new geography with attractive opportunities.

In addition, Chemist Warehouse highlights that it made good progress in transitioning wholesale supply to Sigma to drive efficiency gains and launched Wagner Pharma. It also successfully launched the new Messi men's fragrance, which delivered strong sales during the period. Management believes this demonstrates its ability to innovate and support partners' brands.

Stellar profit growth

Things were even better on the bottom line for Chemist Warehouse, with profit before tax growing at a much quicker rate thanks to margin expansion. The company reported a 400 basis points increase in its earnings before interest and tax margin to 22.3%. This ultimately led to its profit before tax increasing 36.1% over the prior corresponding period to $436.8 million.

Chemist Warehouse's CEO, Mario Verrocchi, was very pleased with the company's performance during the six months. Commenting on the half, he said:

CWG has delivered a record result for 1H FY25 with double digit Like-For-Like Retail Network Sales growth, aided by a strong trading performance in December. We have executed well on the commitments we made in September to deliver sustained growth through new franchise store openings and international expansion while implementing new supply agreements to drive efficiencies. EBIT increased by 35% and margins expanded by 400 basis points.

During the period we also made good progress with the transformational merger with Sigma, which is expected to complete in February. We enter 2025 with confidence and look forward to further growth and network expansion.

The Sigma share price is now up an incredible 215% since this time last year.