CVS Health Corp. topped second quarter earnings expectations and raised its full-year profit guidance, leading to a climb in its stock price Wednesday.
For the three months ending June, the retail pharmacy and pharmacy benefit manager reported adjusted earnings of $1.89 per share, marking a +11.8% increase from the year-ago quarter and a significant beat on the Street estimate of $1.69 per share.
Total revenues for the quarter climbed +35.2% year-over-year to $63.4 billion, also exceeding analysts' forecasts of $62.66 billion. Sales from Aetna (which CVS acquired in 2018) emerged as a significant contributor to the overall revenue growth.
Revenues from Pharmacy Services rose +4.2% to $34.8 billion. Retail sales climbed +3.7% to $21.447 billion, even as same-store sale growth slowed to 3.8%. The group's healthcare benefits division experienced a boost in sales from 764 million to $17.4 billion.
Looking ahead, CVS boosted its full-year earnings outlook to a range of $6.89 to $7.00 per share, up from a prior forecast of $6.75 to $6.90.
However, the drugstore chain is apparently slowing its pace of store openings. While it generally opens about 300 stores every year, CVS Pharmacy President Kevin Hourican said that CVS will open about 100 stores this year and will open about 50 next year – as reported by CNBC. Hourican told CNBC that the real estate growth reduction is “a natural change” given the number of stores CVS has and the growth in areas like delivery.