Second quarter revenue at CVS was up 17.6% driven largely by an increase in pharmacy network claim volume and growth in specialty pharmacy.
Sales for the period ending June 30 were $43.7 billion, up $6.6 billion from the comparable quarter the previous year. Revenue in the company’s pharmacy services segment increased 20.7%, while revenue in the retail/LTC segment were up 16% to $20 billion.
Company-wide operating profit increased 3.9% to $2.4 billion with net income of $0.9 billion, down 27.3%. The drop in income was the result of an extinguishment of debt and an increase in interest expense.
“Operating profit in the retail/LTC segment was in line with expectations while operating profit in the pharmacy services segment exceeded expectations,” said Larry Merlo, CVS president and CEO. “At the same time, we have generated substantial free cash flow year-to-date and continued to return significant value to our shareholders through dividends and share repurchases.”
Same store sales increased 2.1% versus the second quarter of 2015. Pharmacy same-store sales rose 3.9% and pharmacy same store prescription volumes rose 3.5% on a 30-day equivalent basis. Pharmacy same store sales were negatively affected by approximately 355 basis points from recent generic drug introductions.
Front store same-store sales decreased 2.5%, including the effect of the shift of Easter from April in 2015 to March in 2016, which resulted in a decrease in front store same store sales of approximately 80 basis points. Front store same store sales were also negatively affected by softer customer traffic, partially offset by an increase in basket size.
CVS operates 9,652 retail stores, including pharmacies in Target stores, in 49 states, the District of Columbia, Puerto Rico and Brazil.