HomeWorld Business Magazine, homeworldbusiness.com | The Newspaper For Housewares Decision Makers

CVS Beats Street With Help From Front End Sales

Wednesday February 6th, 2013 - 2:42PM


Today, CVS Caremark Corp. announced that, for the fiscal year ended December 31, net income reached $3.88 billion versus $3.49 billion in the year earlier. Net revenues increased 15% to a record $123.1 billion, the company said, with pharmacy services up 24.7% and retail pharmacy up 6.8%.

Adjusted earnings per share in fiscal 2012, excluding $486 million of intangible asset amortization related to acquisition activity, were $3.27. Adjusted earnings per share in fiscal 2011, excluding $452 million of similar intangible asset amortization, were $2.80.

Retail pharmacy, which posted total revenues of $63.7 billion, up 6.8%, experienced a comparable store sales increase of 5.5% over the prior year. Pharmacy comps associated with CVS stores gained 6.5% and front-end comps, including general merchandise, advanced by 3.4%.

Fourth quarter net income reached $1.13 billion versus $1.10 billion in the year-earlier period. Adjusted earnings per share in the fourth quarter were 97 cents versus 89 cents in the year-earlier period. Excluding an extraordinary early extinguishment of debt, adjusted earnings per share were $1.14, which beat a Thomson Reuters average analyst estimate of $1.10.

Fourth quarter net revenue increased 10.9% to $31.4 billion. Retail pharmacy, which posted total revenues of $16.3 billion, up 5.1%, experienced a comp increase of 4% over the prior-year period. Pharmacy comps associated with CVS stores gained 4% and front end comps advanced 3.9%.

Larry Merlo, CVS president and CEO, said, in comments on company sales and earnings, "I'm very pleased with our fourth quarter results. Both the PBM and retail segments turned in strong performances at the high end of our expectations. And we also realized below-the-line benefits in the quarter from a lower effective tax rate and fewer shares than we originally anticipated, resulting in EPS exceeding the high end of our guidance by approximately three cents per share."

In the fourth quarter, CVS opened 37 new retail drugstores and closed two, while relocating eight. As of December 31, the retailer operated 7,525 locations in 45 of the 50 United States, the District of Columbia and Puerto Rico.