Woonsocket, R.I. – Net income at CVS Caremark Corp. increased 18.3% to $1.1 billion in the first quarter of fiscal 2014, compared with approximately $1 billion a year earlier. Pharmacy services and retail pharmacy segments both benefited from the impact of increased generic drugs dispensed and slower growth in expenses.
Net income was also positively impacted by rebate improvement in the pharmacy services segment and an increase in front store gross margins in the retail pharmacy segment. In addition, net revenues performed well, rising 6.3% to $32.69 billion from $30.75 billion. The increase was primarily driven by growth in CVS’ specialty pharmacy business, as well as drug cost inflation, new customers and new products.
Same-store sales grew 1.4%. CVS said same-store sales growth was slowed by a weaker-than-expected flu season and severe weather in much of the U.S.
“We once again posted a very strong quarter, with solid results across the enterprise,” said Larry Merlo, president and CEO of CVS. “I'm particularly pleased with the exceptional growth in the PBM, especially the growth of the specialty pharmacy business. Additionally, with the substantial amount of free cash we generated during the quarter, we remain confident in our ability to achieve our 2014 goals.”