CVS launching prescription delivery
CVS Health is launching delivery of prescriptions and other merchandise from its stores beginning in December.
In a conference call with analysts, CEO Larry Merlo said the company would begin offering next-day delivery from most of its nearly 10,000 stores and offer same-day delivery in metro markets such as New York City beginning in December.
The announcement from CVS comes amid speculation that Amazon is in the final stages of figuring out its strategy to get into the drug market. Reuters reported on Monday that CVS and Aetna are working toward finalizing merger terms and announcing a deal for more than $70 billion as early as December.
Also on Monday CVS, reported slightly better-than-expected revenue and profit for the period but saw same-store sales decline and Merlo did not give any update about the company's rumored plans to aquire Aetna.
For the third quarter ended Sept. 30, CVS reported revenue of $46.18 billion, up 3.5%. Operating profit decreased $325 million, or 11.5%, to $2.5 billion. Net income decreased $256 million or 16.6%, to $1.3 billion.
Revenues in the Retail/LTC Segment decreased 2.7% to approximately $19.6 billion in the three months ended September 30, 2017. The decrease was largely driven by a 3.2% decrease in same store sales, an increase in the generic dispensing rate and continued reimbursement pressure.
Pharmacy same store sales decreased 3.4%. Front store same store sales declined 2.8%and were negatively impacted by softer customer traffic and efforts to rationalize promotional strategies, partially offset by an increase in basket size.
"The solid third quarter results we posted today keep us well on track to achieve our full-year targets. While operating profit in the Retail/LTC Segment was impacted by the devastating hurricanes, operating profit in the Pharmacy Services Segment was in line with expectations," Merlo said. "At the same time, we continued to deliver substantial free cash flow and return significant value to our shareholders through dividends and share repurchases."
Merlo said during the call that at least 925 CVS locations were closed because of the 2017 hurricane season's storms.
"Given our performance year-to-date and our confidence in our expectations for the remainder of this year, we are narrowing and raising the midpoint of our Adjusted EPS guidance for 2017. We remain committed to returning to healthy levels of earnings growth for the total enterprise, and the actions we have taken thus far this year, including our expanded partnerships and new PBM offerings, set us on the right track for growth."
During the third quarter the company opened 56 new retail locations, closed five retail locations and relocated five retail locations. As of Sept. 30, the company operated 9,751 retail locations, including pharmacies in Target stores, in 49 states, the District of Columbia, Puerto Rico and Brazil.