Woonsocket, R.I. -- CVS Caremark Corp. reported a 16% profit jump for its fiscal second quarter, but the drug store operator has dropped the top end of its 2013 earnings forecast to just below Wall Street expectations.
CVS earned $1.12 billion in the second quarter, well above its year-ago profit of $966 million. Revenue rose 1.7% to $31.25 billion, surpassing the $31.14 billion forecast.
During its Tuesday morning second-quarter conference call with analysts, CVS Caremark executives said they were pleased with the “strong” operating results enterprise-wide and expressed optimism looking ahead as it continues to position itself along the front lines of health care and leverage the upcoming changes under health reform.
“We are very pleased with our strong operating results enterprise-wide in the second quarter,” said Larry Merlo, president and CEO. Yet, he said, “considering our strong operating results to date and all other factors affecting our outlook for the remainder of the year, we are narrowing our earnings guidance for 2013.”
Revenues in the retail segment rose 1.9% during the quarter. Same-store sales increased 0.4% with pharmacy same-store sales increasing 0.8%. However, it was the 0.4% dip in front-end same-store sales that caught much of the attention. Merlo indicated that the shift in the Easter holiday negatively impacted (by 65 basis points) the front end, and noted that front-store margins “expanded nicely in the quarter.”