The healthcare company and the drugstore warned in a profit call that it would also feel the pain of the pandemic. Pedestrian traffic has been found to decrease when ordering shelters on site, costs for coronavirus have increased, and doctor’s appointments have decreased, reducing the number of new prescriptions.
CVS CEO Larry Merlo said that, like other companies, he faces “a lot of uncertainty.” But, he said, CVS is in a different position than many other retailers because it sells drugs and health items that people need.
“I would say that the nature of our business is somewhat resisting the recession,” he said. “I wouldn’t say we are safe from the recession. “
This is how the business performed during the first fiscal quarter ended March 31:
- Earnings per share: $ 1.91, adjusted
- Returned: $ 66.8 billion
- Comparable sales: + 9%
The shares were up about 3% on Wednesday morning.
In addition to sales, the use of CVS’s website, application and digital services has increased. Merlo said the trend started in January, but accelerated during the pandemic. Virtual visits via Minute Clinic, its emergency care service, are up 600% compared to the same quarter in 2019. Home delivery of prescriptions is up by 1000%. The use of the corporate application has increased by double digits. And the company has quadrupled the number of customers who add storefront items, such as toilet paper or soap, to prescription home deliveries.
CVS owns the health insurance company Aetna. Its digital usage was also on the rise, he said. More households used the Aetna Health app in the first quarter than in the first three quarters of 2019 combined, said Merlo.
CVS reported adjusted earnings per share of $ 1.91. Revenues for the quarter increased 8.3% to $ 66.8 billion from $ 61.6 billion for the same period last year. Net earnings reached $ 2.01 billion, or $ 1.53 per share, for the quarter ended March 31, compared to $ 1.42 billion, or $ 1.09 per share, a year earlier.
Wall Street forecasts earnings per share 1.63 cents on revenues of 64.01 million dollars, according to a survey by Refinitiv of analysts. However, it is difficult to compare the reported benefits to analysts’ estimates, as the pandemic is disrupting typical purchasing habits and the global economy.
CVS has not changed its financial outlook for 2020 results and liquidity, despite the withdrawal of many other companies due to the pandemic. The company said it expects its 2020 earnings to be between $ 7.04 and $ 7.17 per share, adjusted, and its cash flow to be between $ 10.5 billion and $ 11.0 billion. .
However, he removed other parts of his outlook, citing the effects of Covid-19.
The pharmacy chain kept stores open as an essential retailer during the pandemic. He sold cleaning supplies, over-the-counter medications, and prescriptions. It also opened driving test sites and announced plans to increase to nearly 1,000 sites by the end of May and to process up to 1.5 million tests per month, as long as supplies and laboratory capacity are available.
Sales were solid in all stores. CVS said the pandemic has prompted more customers to order 90-day prescriptions, get early refills and buy more household and health products. the storefront increased by 8% during the quarter. The volume of prescriptions increased sharply, by almost 10%.
CVS is one of the retailers who hired during the pandemic. He announced in late March that he plans to hire 50,000 part-time, full-time and temporary workers to meet demand.
But even some key retailers have felt the effects of the pandemic. The fourth quarter financial results for Walgreens, a pharmacy competitor, show a mixed picture, with customers storing and then taking shelter. In its April call for results, the international chain of pharmacies said comparable store sales had increased 26% in the first 21 days of March. But, he said, they fell a percentage of teens the last week of the month, as pedestrian traffic fell and fewer people bought discretionary items like cosmetics.
CVS is one of the top five US retailers planning to add more driving test sites. Driving service is provided by CVS. He plans to open the new sites in store car parks. Its current driving services are located in large car parks with enough space for several lanes. They use the Abbott Labs rapid test device, which allows patients to obtain test results in minutes.