WOONSOCKET – CVS. Corp. today posted a 10.3-percent increase in annual profits for 2006. Earnings for the full year rose to a record $1.4 billion, or $1.60 per diluted share, from $1.45 per share in 2005.
For the 52 weeks ended Dec. 30, CVS posted record sales of $43.8 billion, up 18.4 percent from its 2005 total. Same-store sales (from stores open and owned for more than a year) rose 8.2 percent, with pharmacy same-store sales rising 9.1 percent and front-end same-store sales rising 6.2 percent. Third-party prescription sales accounted for 94.7 percent of the year’s total pharmacy sales, and pharmacy sales made up 69.6 percent of total sales. Free cash flow for the year was more than $560 million.
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For the 13 weeks ended Dec. 30, CVS posted a rise in net income of 2.7 percent to $417.2 million, or 49 cents per diluted share. The company credited healthy sales growth and a significant improvement in gross margin, driven mostly by the increasing use of generic drugs.
Net sales for the quarter were up 24 percent to a record $12.1 billion, while same-store sales rose 8.7 percent, with pharmacy same-store sales rising 10.2 percent and front-end same-store sales, 5.5 percent. Third-party prescription sales accounted for 94.9 percent of the quarter’s total pharmacy sales, and pharmacy sales made up 68.4 percent of total sales.
The company estimated that its June 2 acquisition of 701 standalone Sav-on and Osco drugstores from the Albertson’s supermarket chain pared annual profits by about 12 cents per diluted share, and fourth-quarter profits by about 5 cents per share.
“2006 was an outstanding year for CVS,” said Tom Ryan, chairman, president and CEO, listing highlights such as the Osco/Sav-on acquisitions and the opening of “265 new or relocated stores.” Over the course of the year, CVS noted, the company opened 147 new stores, relocated 118 and closed 117. As of Dec. 30, it operated 6,202 retail and specialty pharmacy stores in 43 states and the District of Columbia.
“Of course,” Ryan said, “the biggest news was the announcement of our merger of equals with Caremark. … We look forward to closing the deal in a few weeks, upon receipt of approval from the [companies’] shareholders.”
In a separate announcement today, the company estimated its January revenue rose 24.2 percent to $3.7 billion. Same-store sales were up 8.6 percent, year over year, with pharmacy same-store sales rising 8.7 percent and front-end same store-sales rising 8.2 percent.
Additional information is available at investor.CVS.com and at www.cvs.com/pressroom.
