CVS Health reported surging earnings and revenue above Wall Street estimates as customers stockpiled medications and other essentials ahead of the spreading COVID-19 pandemic.
But on its earnings call with analysts, CVS executives said that stores saw a drop in traffic after the quarter ended as people stayed home amid shelter in place orders and a decline in doctor’s appointments that leads to fewer new prescriptions.
CVS’ net income surged to $2.01 billion, or $1.53 per share, in the quarter ended March 31, from $1.42 billion, or $1.09 per share, in the year-ago period.
Total revenue increased 8.3% to $66.8 billion. Sales at CVS's retail and pharmacy segments rose 77% to $22.75 billion driven by greater use of 90-day prescriptions and early refills of maintenance medications, as well as increased front store volume.
The company reported an 8.0% increase in retail same-store sales. The growth was primarily due to strength in consumer health and general merchandise sales, which was primarily driven by COVID-19 related sales, along with the expansion of the CarePass program.
Revenue from the company’s pharmacy benefit management unit rose 4% to nearly $35 billion
Unlike many other companies, CVS has not changed its financial outlook for 2020 earnings and cash due to the pandemic. The company said it expects its 2020 earnings to be between $7.04 to $7.17 per share, adjusted, and its cash flow to be between $10.5 billion to $11.0 billion.