"By any measure 2005 was an really an outstanding year for CVS," Tom Ryan, the firm's president and chief executive officer said in a conference call announcing the results. "I'm equally optimistic about 2006."
The company, which saw net earnings for the year jump by 31.8% to a record $1.2 billion, or $1.45 per diluted share, said January sales at stores open at least a year were also strong, increasing 5% due to the demand for non-prescription products. The recent introduction of generic versions of several name brand drugs kept pharmacy sales muted, however, with same-store pharmacy sales increasing 6.3% while front-end same-store sales rose 7.7%. Digital-photo sales also had an impact on the bottom line, increasing overall by 90% for the year, CVS officials said.
The rapidly expanding Woonsocket, RI-based chain, which operates more than 5,000 locations, said it also expects strong sales from its acquisition of stand-alone Sav-on and Osco drugstores, which it plans to acquire from Boise, ID-based Albertsons, Inc. in June. The acquisition of those 700 stores is expected to cost the drug store giant $2.9 billion but should generate $5 billion in annual sales income, the company said.
CVS, which last year acquired the Eckerd Drug chain, said its revenue rose 9% to $9.73 billion in 2005, up from $8.92 billion a year earlier.
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