WOONSOCKET – CVS Health Corp. on Thursday announced plans to close approximately 900 stores nationwide over the next three years, citing changes in population, consumer-buying patterns and future health care needs.
“Our retail stores are fundamental to our strategy and who we are as a company,” Karen S. Lynch, CEO and president of CVS, said in a statement. “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”
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The company expects to close about 300 stores a year for the next three years, beginning in the spring of 2022. The company, which operates approximately 10,000 stores nationwide, did not identify where the closing will take place or if Rhode Island stores will be affected.
CVS operates 67 retail pharmacies in Rhode Island and employs approximately 8,600 in the state.
CVS spokesperson Tara Burke told Providence Business News the planned closings are in part a response to consumer demand for convenience beyond physical locations.
“As part of this, consumers are asking for a simple omnichannel experience and while today more than 20% of scripts are omnichannel, it is projected to be 50% by 2025,” she said.
“In addition, market pressures, wage inflation, and heightened front store competition are catalysts to reset our store footprint to a more efficient scale,” she added. “We recognize the need to design a footprint that considers changes in population, community needs and future consumer buying and health care consumption patterns. We also need to consider the dynamics of the new labor market.
“By closing certain stores and consolidating volumes, we can invest more in the consumer experience in our prioritized stores,” she said.
Due to the planned closings, the company said it expects to record an impairment charge in the fourth quarter of 2021 of between $1 billion and $1.2 billion or 56 cents to 67 cents of diluted earnings per share.
The company also confirmed its full year 2021 adjusted earnings per share guidance range of $7.90 to $8 and its full year 2021 cash flow from operations guidance range of $13 billion to $13.5 billion.
CVS shares rose by $1.21 to $93.94 on the New York Stock Exchange in late morning trading.
PBN staff writer Marc Larocque contributed to this report.
(ADDS paragraphs 5-8 with company comment; MINOR edits.)
