In the midst of reorganizing the company, CVS Health posted lower net income that was still good enough to beat a Wall Street estimate, and it recorded a front-end comp gain.
CVS topped MarketBeat-published analyst consensus estimates for income of $2.07 per adjusted diluted share and revenues of $80.67 billion.
Net revenues were $85.28 billion versus $76.83 billion in the year-previous quarter. Operating income was $3.45 billion versus $3.55 billion in the period a year before while adjusted operating income was $4.37 billion versus $4.61 billion, the company reported
In the Pharmacy & Consumer Wellness Segment, which includes stores and was the Retail/LTC Segment before the company’s operating realignment, sales increased to $27.92 billion versus $25.9 billion in the year-previous quarter, but adjusted operating income slipped to $1.13 billion from $1.57 billion year over year. Comparable store sales increased by 11.6% while front-end sales, including general merchandise, increased by 7.7%
Effective in the 2023 first quarter, CVS realigned the composition of the company operating segments to correspond with changes made to its operating model and how the business is managed, it pointed out. As a result of this realignment, the company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management services, also delivers health care services in the CVS medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the company established a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, in addition to retail front store operations. This segment also will provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail-order pharmacy offerings. CVS also discontinued its former segment reporting practice for activity under its Maintenance Choice program. With the realignment, the company noted, its four reportable segments are Health Care Benefits, Health Services, Pharmacy & Consumer Wellness and Corporate/Other.
In announcing the financial results, Karen Lynch, CVS Health president and CEO, stated, “We delivered another strong quarter while executing on the strategy we outlined in December 2021, leading to the close of the Signify Health acquisition followed quickly by Oak Street Health. These additions are core to our strategy and will help unlock future growth as we push further into value-based care, which prioritizes keeping people healthy.”
