CVS Caremark Corp. reported a 4.5 percent upswing in first-quarter profits on a 1.6 percent rise in revenues for the first quarter ended March 31, despite the impact of a weak flu season and severe weather in certain markets on the firm’s front-of-store and pharmacy same-store sales.
This story first appeared in the May 5, 2010 issue of WWD. Subscribe Today.
Net earnings reached $771 million, or 55 cents a diluted share, compared with $738 million, or 50 cents, in the year-ago quarter. The Woonsocket, R.I.-based drugstore chain noted that adjusted EPS from continuing operations attributable to the firm, which excludes $105 million of intangible asset amortization related to acquisition activity, were 60 cents for the quarter, compared with a consensus estimate of 58 cents among analysts polled by Yahoo Finance and a mark of 55 cents in the prior year.
Net revenues came in at $23.8 billion, from $23.4 billion a year ago, helped by a 3.6 percent increase in retail pharmacy sales to $14 billion. The pharmacy business accounted for 68.4 percent of quarterly revenues.
Same-store sales at CVS increased 2.3 percent. At quarter’s end, CVS operated 7,063 drugstores, making it the country’s number-two drugstore chain by store count, behind only the roughly 7,200 units operated by Walgreens.
Front-of-store same-store sales were off 0.7 percent, compared to a 0.7 percent increase last year. Results were hurt by the inclusion of stores added as part of the Longs Drug Stores acquisition in October 2008 but helped by an earlier Easter this year, according to the firm. Front-of-store net revenues were up 1.3 percent, compared to a 15.6 percent increase a year ago.
Tom Ryan, chairman, president and chief executive officer, said he was “pleased” with the quarterly results, adding, “solid performance was driven by continued market share gains and better expense leverage.”
CVS increased the low end of its full-year EPS guidance by 3 cents and said it now expects adjusted EPS from continuing operations to be in the range of $2.77 to $2.84.
Shares of CVS closed at $36.48, down 60 cents, or 1.6 percent.