The Woonsocket-based CVS Corporation, now the nation’s largest pharmacy chain after acquiring 1,260 Eckerd stores, said Wednesday that it had “record” sales of $6.94 billion in the second quarter of 2004, up 7.7 percent from the same period last year.
Second-quarter net earnings rose even more dramatically, to $234.5 million, up 17.4 percent from last year.
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New stores provided an extra sales boost, but sales at established stores open for at least a year also rose by 6.1 percent, with a larger increase on the pharmacy end (7.0 percent) than in general merchandise (4.1 percent), the company reported. Total pharmacy sales represented 69.1 percent of total company sales for the quarter.
“I am very pleased with our results this quarter,” Tom Ryan, board chairman, president and CEO, said in a news release. “We had healthy sales growth as the front-end regained momentum and gross margin performance was better-than-expected.” The jump in net earnings, Ryan added, provides “further evidence that our core business is thriving.”
For the second quarter, CVS opened 22 new stores, closed 3 and relocated 17 others. As of July 3, it had a total of 4,206 retail and specialty pharmacy stores in 32 states and the District of Columbia. On July 31, CVS completed the acquisition of the 1,260 Eckerd drug stores, located mainly in the South, as well as Eckerd Health Services, which includes Eckerd’s mail order and pharmacy benefit management businesses.
“The completion of the Eckerd acquisition announced earlier this week couldn’t have come at a better time for this company,” Ryan said. He added that the integration process had already begun “under the leadership of an experienced team.”
On a conference call with analysts, CVS said the changeover has gotten a good start, and it now expects to close fewer than 200 of the 1,260 Eckerd stores, down from its initial plan to close as many as 225, Reuters reported.
CVS plans to spend $300,000 to $350,000 to convert each store, Reuters reported. It will upgrade shelves and signage, put in new carpeting and bring its own technology systems into the stores, which had been losing money.
