CVS Corp.’s third-quarter results released Nov. 4 show a 24-percent net sales
increase and a 1.7 percent net earnings decrease upon this summer’s Eckerd acquisition.
Net sales for the third quarter, ended Oct. 2, increased 24 percent to $7.91 billion, up from $6.38 billion during the third quarter of 2003 following the July 31 acquisition of 1,268 Eckerd drugstores, including Eckerd’s pharmacy benefit management and mail-order pharmacy business.
“The third quarter was another strong quarter for CVS. The core business is thriving, and the integration of Eckerd’s store and PBM businesses is ahead of schedule,” stated Tom Ryan, chairman, president, and CEO of Woonsocket-based CVS. “We delivered healthy sales growth and better-than-expected gross margin improvement, resulting in solid earnings performance.”
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Same store sales from stores open more than one year – excluding the acquired Eckerds – for the quarter rose 5.2 percent, while pharmacy same store sales rose 6.8 percent and front-end same store sales increased 1.8 percent.
The acquired stores will be included in same store sales following the one-year anniversary of the acquisition, beginning in fiscal August 2005.
Net earnings for the third quarter decreased 1.7 percent to $184.6 million, compared with net earnings of $187.8 million in the third quarter of 2003 due to the Eckerd acquisition.
The company is working to assimilate Eckerd to CVS stores, putting between $300,000 and $350,000 into about 11,000 stores through July of next year, when the transformation is scheduled for completion. The company bought 1,260 stores and is closing about 160 stores that are close to other CVS locations.
CVS is adding employees and merchandise to the Eckerd stores and increasing television and flier circulation in those markets. The company will also add store hours to keep stores open either late night or 24 hours, depending on the need in each location, CVS spokesman Mike DeAngelis said.
In addition to the acquisition of 1,268 drugstores, CVS opened 49 new stores, closed 140 stores and relocated 37 others.
