Dive Brief:
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CVS Health Tuesday reported Q4 earnings of $1.5 billion or $1.34 per share, meeting expectations from the street. The drugstore and health care services retailer also reported Q4 revenue of $41.15 billion, beating expectations of $41.01 billion.
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Retail sales rose 12.5% to $19.9 billion, about half of which stemmed from its acquisition last year of drug distribution company Omnicare. Pharmacy sales, for example, grew 11.1% to $26.5 billion, thanks to a boost in sales of specialty drugs and a 7.2% increase in processed claims. Same-store sales rose 3.5%, boosted mostly from pharmacy sales, with non-pharmacy sales falling 0.5% due to decreased traffic.
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The company confirmed its forecast for Q1 and the full year; in Q1 CVS Health expects per-share earnings to be between $1.14 to $1.17, which would meet expectations. The company affirmed full-year earnings will range from $5.73 to $5.88 per share.
Dive Insight:
CVS Health’s move to acquire drug distribution company Omnicare has apparently paid off. In addition to boosting sales in some categories, the acquisition has allowed the retailer to move forward with its move to solidify its medical care focus.
The retailer continues to suffer from its decision to forego tobacco sales, but that has also been in the name of being a well-rounded health care company, which tobacco sales would undermine.
CVS has also begun to establish its stores within Target stores after its acquisition last year of Target's pharmacy business, which will help expand its footprint in the U.S. That move will boost CVS’s number of pharmacies by some 20% and will allow it to enter new markets, including in Seattle, Denver, and Portland, OR, without building new stores.
