WOONSOCKET, R.I. CVS Caremark posted record revenues, operating profit and earnings for the second quarter.
“This was another quarter of strong financial performance across our business,” stated Tom Ryan, chairman, president and chief executive officer. “We delivered solid improvement in sales and gross margins and continued to exercise disciplined expense control. That enabled us to hit a record operating profit margin this quarter. At the same time, we’ve further advanced our new PBM/retail model and our clients have expressed growing enthusiasm for our unique new product offerings.”
Net revenues for the quarter rose $437 million to $21.1 billion, up from $20.7 billion in the year-ago period.
Revenues in the retail segment rose 4.6 percent to $11.8 billion in the quarter ended June 28, while same-store sales in the company’s CVS/pharmacy division climbed 3.1 percent compared with the year-ago period. Pharmacy same-store sales rose 3.7 percent and were negatively impacted by about 280 basis points due to recent generic introductions. Front-end same-store sales increased 1.8 percent. The company estimates that the Easter shift, which shifted more holiday sales into March, had a negative impact of about 110 basis points on front-end same-store sales.
Revenues in the pharmacy services segment rose 1 percent to $10.7 billion. Retail network claims processed during the second quarter increased 2.7 percent to 136.3 million compared with 132.7 million in the year-ago period. The boost in retail network claims was driven primarily by increased enrollment in the Medicare Part D business. Mail service claims processed decreased 18.9 percent to 15 million compared with 18.5 million in the year-ago period primarily due to termination of the Federal Employees Health Benefit Plan mail contract effective Dec. 31, 2007.
Earnings from continuing operations for the quarter rose 13.8 percent to $823.5 million, or 56 cents per share, compared with earnings from continuing operations of $723.6 million, or 47 cents per share, in the year-ago period.
For the quarter, CVS Caremark opened 49 new retail pharmacy stores, closed eight retail pharmacy stores and relocated 39 others. As of June 28, the company operated 6,308 retail pharmacy stores, 56 specialty pharmacy stores, 19 specialty mail order pharmacies and seven mail order pharmacies in 44 states and the District of Columbia.