Pharmacy sales boost CVS profit in Q1
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.”
WinCo set to open Arizona DC
Boise, Idaho – WinCo Foods LLC will begin shipping from its newest distribution center in Phoenix, on May 14. The center, which includes more than 900,000 sq. ft. of warehouse space, will initially service 19 WinCo Foods stores located in Arizona, Southern Nevada and Southern California.
The facility will open with approximately 185 employees, most of whom have been hired from the greater Phoenix market. The 19 stores represent a little more than half of the facility’s capacity. When fully operational and at capacity the center should employ approximately 320 employees.
The center has approximately 500,000 sq. ft. of dry grocery space and more than 360,000 sq. ft. of perishable space, which is divided into several modules maintained at appropriate temperatures and humidity levels for frozen items, fresh produce, meat and dairy products. It also includes six large pressurized banana ripening rooms. The remainder of the center is comprised of offices and outbuildings. There is preplanned space at the site to expand by up to 50% in the future.
Natural Grocers net income climbs; plans six new stores
Lakewood, Colo. – Net income climbed 24.3% at Natural Grocers by Vitamin Cottage Inc. in the second quarter of fiscal 2014, rising to $4 million from $3.21 million in the same quarter the prior fiscal year. For the remainder of the current fiscal year, Natural Grocers plans to open six new stores and remodel one.
Natural Grocers attributed net income growth to lower store salary and television advertising expenses. Net sales increased 22.4% from the same period in fiscal year 2013 to $130.3 million from $106.5 million due to a $16.6 million increase in sales from new stores and a 6.9%, increase in same-store sales.
Looking ahead, Vitamin Grocers plans to sell only pasture-raised, non-confinement dairy products by April 2015.
"Our sales increases and disciplined approach toward operating expenses have resulted in strong financial results this quarter which allowed us to continue our investments into growth," said Kemper Isely, co-president.