Flu Cough Is Music to CVS

The drugstore chain wipes out analysts' estimates on big sales gains.
By TSC Staff ,

Fourth-quarter earnings shot up more than 31% at

CVS

(CVS) - Get Report

, wiping out analysts' forecasts, as the brutal flu season continued bringing customers to drugstores.

The Woonsocket, R.I., retail chain earned $263.4 million, or 64 cents a share, in the latest quarter compared with earnings of $200.1 million, or 49 cents a share, last year. Sales rose 17.5% to $7.45 billion from a year ago on a 7.4% jump in same-store sales.

Analysts had been predicting earnings of 58 cents a share. The shares were recently up 76 cents, or 2.1%, to $36.89.

"The company's fourth quarter results were driven by strong sales growth and a significant improvement in gross margin, which resulted from a reduction in inventory losses, a strong flu season and an improved sales mix," CVS said. Total pharmacy sales represented 67.8% of total company sales for the quarter, with third-party prescription sales making up 93.3% of pharmacy sales.

CVS also said Thursday that January sales rose 6.9% to $2.04 billion on a 5.6% rise in same-store sales. The results reflected an 8.2% jump in January pharmacy same-store sales and unchanged results in the chain's front end, which means everything that isn't drugs.

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