CVS pharmacy sales offset lost tobacco revenues

CVS Caremark reported a drop in front-store sales as a result of its decision to phase out tobacco products, but pharmacy sales drove second-quarter earnings past Wall Street expectations.

CVS reported second-quarter earnings increased 11%. CVS officials attributed the earnings increase to specialty drug sales through its retail outlets and its pharmacy benefits manager (PBM).

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CVS reported that revenue from its PBM increased 16%. Operating profits from the PBM jumped 30%. Pharmacy same-store sales increased 5%, driving overall same-store sales up 3.3%.

CVS CEO Larry Merlo said the PBM gives the company a chance to "not just manage the specialty drug but manage the specialty patient."

CVS reported second-quarter earnings of $1.25 billion, or $1.06 per share. Last year’s second quarter produced $1.12 billion, or 91 cents per share.

Overall, CVS reported second-quarter revenues of  $34.6 billion, up significantly from last year’s $31.25 billion second-quarter earnings.

The earnings increase came despite a 0.4% decrease in front-store sales. CVS said front-store sales would have been 110 basis points higher if tobacco sales had been excluded.