(Reuters) - Canadian pharmacy chain Jean Coutu Group Inc (>> The Jean Coutu Group (PJC) Inc.) reported a 3 percent rise in quarterly revenue as an increase in the number of franchised stores helped offset the impact of higher sales of generic drugs.

Prices of generics are generally lower than branded drugs as companies compete to sell medicines that are essentially interchangeable.

Price-controls for generic drugs, aimed at cutting costs for government and private health programs, have also hurt Jean Coutu and rivals such as Shoppers Drug Mart, owned by Loblaw companies (>> Loblaw Companies Limited)

Jean Coutu has been adding small-sized stores and adding new products, especially to its private label brands.

Generic drugs accounted for 68.1 percent of prescriptions in the second quarter, compared with 67.2 percent, a year earlier, Jean Coutu said on Wednesday.

Gross sales of Pro Doc generic drugs rose to C$48.1 million ($43 million) in the quarter ended Aug. 30, from C$44.6 million a year earlier.

Same-store sales rose 2.4 percent in the quarter, compared with a 0.1 percent fall a year earlier.

Revenue rose to C$674.4 million from C$653.8 million.

Net profit fell to C$53.6 million, or 28 Canadian cents per share, in the quarter ended Aug. 30, from C$208.2 million, or 99 Canadian cents per share, a year earlier.

The Longueuil, Quebec-based company had a gain of C$158.3 million related to the investment in drugstore chain Rite Aid Corp (>> Rite Aid Corporation) a year earlier.

Up to Tuesday's close, Jean Coutu's stock had risen more than 34.5 percent in the past 12 months, outperforming the TSX-Toronto Stock Exchange 300 Composite Index's <.GSPTSE> 18 percent increase.

(Reporting by Sneha Banerjee in Bangalore)