CVS posts strong Q2; expanding customer services, HealthHub locations
CVS Health has its eye on a lot more than traditional drugstore services.
The company on Wednesday posted better-than-expected earnings and revenues, upped its annual earnings forecast and renewed its commitment to fighting COVID-19. On an earnings call, CVS CEO Larry Merlo told analysts that that “CVS Health is much more than just your corner drugstore.”
“And in this era of COVID, our strategy of diverse assets across health care, this triad of care where connections are delivered in the community and home and in the palm of your hand could not be more important,” he said. “Increasingly, the power of our assets is taking us into areas that provide greater choice as well as new areas for growth, ranging from diagnostic testing to B2B solutions, to the potential of clinical trial recruitment and enrollment.”
CVS recently launched “Return Ready,” a COVID-19 testing program, to its Aetna and Caremark clients. More than 40 clients, including universities and corporations, are currently enrolled in the program, which enables organizations to screen and test their employees or students and monitor their populations through integrated reporting capabilities. The company said it has a strong pipeline of demand of more than 1,000 prospects for the core testing offering, as well as add-on health and safety solutions such as contact tracing and on-site immunization clinics for the upcoming seasonal flu.
“And as we look ahead, we are well-positioned to administer COVID-19 vaccines, once they become available, through our community presence. as well as on-site with our Return Ready and long-term care solutions,” Merlo added.
CVS also continues to evolve its health-focused HealthHub store format. After pausing store conversions to the format in late March, it resumed in mid-June, and now has 205 locations opened across 22 states.
“We remain on-track to open approximately 1,500 hubs by the end of 2021, Merlo said.
To date, CVS has opened more than 1,800 drive-thru COVID-19 test locations. It administered nearly 2 million COVID-19 tests nationwide through end of July. About 40% of those tested at a CVS pharmacy were not pharmacy customers previously.
“We’re now connected with them digitally with the objective of making them long-term CVS customers,” Merlo said.
CVS reported net income of $2.98 billion, or $2.26 per share, for the quarter ended June 30, up from $1.94 billion, or $1.49 per share, a year ago. Adjusted earnings per share came in at $2.64.
Revenue rose 3% to $65.3 billion, beating analysts’ expectations. Front end sales dropped 4.6% and prescription volume decreased 1.1% as many customers stayed at home amid shelter-in-place orders. Prescription volume was also affected by less folks seeking out medical treatment during the pandemic.
In late March, CVS announced plans to hire 50,000 full-time, part-time and temporary roles across the country. It has hired more than 40,000 people so far.