CVS Q1 Earnings Chilled By Rough Winter

For the three months ended March 31, CVS Caremark Corp. missed an analyst earnings estimate, posting net income of $1.13 billion, or 95 cents per diluted share, versus $954 million, or 77 cents per diluted share, in the year-earlier period. Comparable store sales increased 1.4% versus last year’s first quarter, with pharmacy comps up 3.8% and front end comps, including results from general merchandise such as home goods, down 3.8%.

According to the company, a weaker flu season and severe weather across much of the United States hurt both front end and pharmacy comps. The company added that the Easter shift from March in 2013 to April in 2014 crimped front-end comps.

Still, front end basket size improved modestly in the quarter while front end margins improved notably, CVS asserted.

Adjusted earnings per share in the first quarter came in at $1.02 versus 83 cents in the year-ago period, the company declared. Adjusted EPS for the three months ended March 31 excludes $131 million in one-time charges while the period for 2013 includes $122 million in like costs, in both cases tied to acquisition-related intangible asset amortization, CVS stated.

Adjusted EPS was two cents below an analyst average estimate from Thomson Reuters.

“Adjusted EPS increased 22.5%, to $1.02, which was a penny below our expectations primarily due to the significant amount of unforeseen weather-related issues we experienced throughout the quarter,” Larry Merlo, CVS president and CEO, said in announcing the financial results.

In the first quarter, CVS opened 22 new retail drugstores, and closed seven, ending up the period with 7,829 locations in 47 of the United States, the District of Columbia, Puerto Rico and Brazil, including 7,675 drugstores, 17 on-site pharmacies, 24 retail specialty pharmacy stores, 11 specialty mail order pharmacies and four mail service dispensing pharmacies, as well as 84 branches and six centers for infusion and enteral services.