People walk past a CVS pharmacy store in the Manhattan neighborhood of New York City.
Shannon Stapleton | Reuters
CVS Health reported a strong first quarter on Tuesday and increased its guidance for the full year as customers came into its stores for Covid-19 vaccinations, tests and prescriptions.
The company was a major supplier of Covid-19 vaccines and has recently started offering same-day appointments.
The company’s shares rose nearly 2% in premarket trading.
The company reported for the first fiscal quarter ended March 31, versus analyst expectations, based on an analyst survey conducted by Refinitiv:
- Adjusted earnings per share: Expected $ 2.04 versus $ 1.72
- Revenue: $ 69.1 billion versus $ 68.39 billion expected
The healthcare company and drug store chain reported net income of $ 2.22 billion, or $ 1.68 per share, compared to $ 2.01 billion, or $ 1.53 per share, last year.
Excluding items, the company made $ 2.04 per share, more than the $ 1.72 per share that analysts surveyed by Refinitiv had expected.
Revenue increased from $ 66.8 billion a year ago to $ 69.1 billion. This exceeded analysts’ expectations of $ 68.39 billion.
The company has raised its forecast for the year. Earnings are expected to range between $ 6.24 and $ 6.36 per share in 2021 and, after adjustments, between $ 7.56 and $ 7.68 per share.
It was reiterated that cash flow from operating activities is projected to be between $ 12 billion and $ 12.5 billion for the full year.
The drugstore chain was faced with challenging comparisons in the retail business in the quarter compared to the previous year. During the same period last year, customers were rushing to fill out prescriptions early and stock up on other health and personal care items before ordering accommodation. Virtual visits and home deliveries of prescriptions increased – and customers tossed more items like soap and shampoo from the front of the store into their baskets in stores and online.
CVS announced Tuesday that it had lower front-store sales for the first quarter of this year due to accelerated demand in March 2020 and a weak cough, cold, and flu season.
Sales in the same store in the pharmacy and in the front store increased by only 0.4% compared to a growth of 9% in the previous year. Sales in the same store for the front store decreased 11.4%.
However, revenue from Covid-19 tests and vaccinations increased. CVS captured the footage in its branches and long-term care facilities. The number of prescriptions prescribed on a 30-day basis was roughly the same as in the previous year.
CVS has performed over 23 million Covid tests and over 17 million vaccines as of April, CEO Karen Lynch said in a call for profit. She said these services also helped the drugstore chain attract customers. Among those new to CVS who have received Covid tests, she stated that the conversion rate on a new prescription at the pharmacy was around 9%.
CVS, which owns health insurer Aetna, has focused on bringing different parts of its business together into a healthcare ecosystem. For example, many Aetna members can attend Minute Clinics with little or no additional payment. Those with one of these health insurance plans are about 50% more likely to visit one of the emergency clinics located in CVS stores, Lynch said.
The company has converted around 800 of its stores into HealthHubs, a store model that includes more services like sleep apnea testing and mental health appointments with clinical social workers.
At the close of trading on Monday, CVS shares were up nearly 14% that year. They closed at $ 77.69 on Monday, bringing the company’s market value to $ 101.97 billion.
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