CVS Health Corp. posted a 3 percent sales gain for the first quarter.
Net income for the period was $953 million, a 16.9 percent decrease, driven by a decline in operating profit. Net revenues for the three months ended March 31 were $44.5 billion, up 3 percent from $43.2 billion in the prior-year period. Revenues for the pharmacy services segment were up 8.5 percent to $31.2 billion, while retail revenues decreased 3.8 percent to $19.3 billion. The retail decrease was driven by a 4.7 percent drop in same store sales. Earnings per diluted share were 92 cents, compared to $1.04 in the prior-year period.
CVS confirm its previous full-year guidance, projecting diluted EPS of $5.02 to $5.18.
CVS plans to close 70 stores during 2017 and expects a $220 million charge related to lease obligations of those locations.
President and chief executive officerLarry Merlo said that “2017 is off to a solid start as we posted results this quarter that surpassed our expectations. At the same time, we generated $3.1 billion of free cash and continued to return value to our shareholders through high-return investments in our business as well as dividends and share repurchases. However, while we are pleased with our financial performance versus our expectations, we won’t be satisfied until the company returns to sustainable, healthy earnings growth.
“We continue to expect 2017 to be a rebuilding year, but our goals remain clear, and we fully intend to return to healthy levels of growth,” Merlo added. “We remain confident in our model as well as our position in the evolving health care landscape, and our ability to generate significant levels of cash will continue to play an important role in driving shareholder value over the longer term.”