Woonsocket-based CVS Corp. announced Thursday third-quarter sales and earnings for the quarter ended Oct. 2.
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, reflecting the impact of the acquisition on July 31 of 1,268 Eckerd drugstores, as well as Eckerd’s pharmacy benefit management and mail-order pharmacy business.
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Same store sales (i.e., sales from stores open more than one year) 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. Same store sales do not include the sales results of the acquired drugstores mentioned above. The acquired stores will be included in same store sales following the one-year anniversary of the acquisition, beginning in fiscal August 2005. Total pharmacy sales represented 71 percent of total company sales for the quarter. Third-party prescription sales were 93.8 percent of pharmacy sales for the quarter.
Net earnings for the third quarter decreased 1.7 percent to $184.6 million or 44 cents per diluted share, compared with net earnings of $187.8 million or 46 cents per diluted share in the third quarter of 2003. The company estimates that the Eckerd acquisition had a negative impact of approximately 7 cents per diluted share in the third quarter of 2004. The company’s third-quarter results compared to last year were driven by increased selling, general and administrative costs attributable to the integration of the acquired businesses, offset in part by continued strong margin performance.
“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 CVS, in a release. “We delivered healthy sales growth and better-than-expected gross margin improvement, resulting in solid earnings performance.”
For the third quarter, CVS acquired 1,268 drugstores, opened 49 new stores, closed 140 stores and relocated 37 others. As of Oct. 2, CVS operated 5,383 retail and specialty pharmacy stores in 36 states and the District of Columbia.
