CVS Health Corporation’s (CVS) retail section noticed a lower of two.7%, because of the hurricanes, in line with CEO Larry Merlo throughout the pharmacy chain’s third-quarter earnings report Monday, Nov. 6.
Same-store gross sales in pharmacy dipped three.four%, whereas front-store same-store gross sales additionally declined by 2.eight%. Customer visitors was softer, in line with the corporate, however this was partially offset by greater basket sizes. Operating revenue was additionally down 13.1%.
Starting subsequent 12 months, CVS will kick off next-day supply for all of its shops, whereas choose cities will supply same-day supply.
CVS isn’t any novice on the subject of supply; it is already an possibility for 1,600 shops. And by means of Instacart, 2,800 whole shops supply supply.
“We’ve been able to use our scale to negotiate a low-cost competitive option that we think consumers will be willing to pay for, both in same and next-day delivery,” mentioned Helena Foulkes, president of CVS Pharmacy, within the name. “We think the best experience for the consumer is one where she can toggle back and forth and decide someday she wants to come into the stores and some days, [she] just can’t get out of the house.”
The firm beat Wall Street estimates, posting earnings per share of $1.50 and $46.2 billion in income within the three months ending Sept. 30. That’s in comparison with badyst consensus of $1.48 per share and gross sales income of $46.17 billion, in line with Factset. Revenue rose three.5% in comparison with the identical interval final 12 months, together with eight% progress in pharmacy providers.
In the third quarter, CVS opened 56 new shops and closed 5. Its retailer depend now reaches 9,751, together with these in Target Corporation (TGT) shops. Company executives didn’t touch upon the alleged $70 billion deal to ambad medical health insurance firm Aetna Inc. (AET) within the earnings name, however Merlo highlighted CVS’ partnership with Anthem Inc. to launch new pharmacy profit administration firm known as IngenioRx.
“We believe that this contract is further validation of the important role that CVS Health’s integrated and innovative pharmacy care model plays in today’s health care system,” he mentioned.
CVS has lengthy developed its PBM arm, with the acquisition of Caremark Rx Inc. in 2006 and Omnicare Inc. in 2015, carving a novel retail path for itself focusing more and more on healthcare ventures.
Thanks to its Q3 earnings, CVS raised its full-year steering vary. The retail pharmacy chain now expects 2017 earnings to be between $5.87 and $5.91 per share, up from between $5.83 and $5.93. Cash move is now projected to a complete of $eight.6 billion, up from $7.7.
“Our expanded partnerships and new [pharmacy benefit management] offerings set us on the right track for growth,” Merlo mentioned in a press release.
CVS’ report comes on the heels of stories that it is on observe to ambad medical health insurance firm Aetna Inc. (AET) for about $70 billion, a price ticket that might worth Aetna at greater than $200 per share.
If the merger goes by means of, it might be an unprecedented convergence of two industries, specialists advised TheStreet final month.
“CVS is definitely more of a healthcare company with a retail presence than the other way around,” mentioned Jeremy Bryan, a portfolio supervisor at Gradient Investments LLC, a minor CVS shareholder.
CVS shares are stagnant Monday morning pre-trading, lingering at about $69.
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