CVS Posts Higher Revenue, Boosted by Covid Vaccine Demand

CVS Health Corp. CVS 1.30% posted higher revenue in the holiday quarter, lifted by the more than 20 million Covid-19 vaccines it administered in the period.

With a boost from the vaccinations and the over 8 million Covid-19 tests CVS administered in the quarter, same-store sales grew by 13.4% from a year earlier, when the vaccines were just being authorized.

Both CVS and rival Walgreens Boots Alliance Inc. have played prominent roles in the U.S. effort to distribute Covid-19 vaccines across the country. The drugstore chains have also been key to the federal effort to make available rapid, at-home Covid-19 tests, which were outstripped by demand in the latest quarter as Americans sought to get tested around the holidays.

In the three months ended Dec. 31, CVS said sales in its retail business rose 12.7% from a year earlier to $27.11 billion. Covid-19 vaccinations, diagnostic testing and the sale of over-the-counter test kits made up about 40% of the increase in the segment’s revenue, the company said.

Staffing shortages have stressed both CVS and Walgreens, as pharmacists and pharmacy technicians have scrambled to juggle Covid-19 testing and vaccines with filling prescriptions and serving customers. CVS has said it hired nearly 20,000 pharmacists, pharmacy technicians and nurses earlier this year to meet the demands.

Amid a surge in cases, some countries are handing out second booster shots. In Israel, early data suggest a fourth vaccine dose can increase antibodies against Covid-19, but not enough to prevent infections from Omicron. WSJ explains. Photo composite: Eve Hartley/WSJ

The Woonsocket, R.I.-based pharmacy and healthcare company has seen its costs rise along with its sales over the past year. Total cost of products sold rose to $46.38 billion in the quarter, up from $42.45 billion a year earlier.

Still, the company posted a quarterly profit of $1.31 billion, or 98 cents a share, up from $973 million, or 74 cents a share, in the year-ago period. On an adjusted basis, the company posted earnings of $1.98 a share, beating analyst expectations of $1.83 a share, according to FactSet.

CVS’s total revenue, which includes its health-insurance and pharmacy-services businesses, grew by 10.1% from a year earlier to $76.60 billion, the company said. Analysts surveyed by FactSet expected sales of $75.66 billion.

A CVS store in New York City. The company’s quarterly revenue and profit beat analyst expectations.

Photo: Gabby Jones for The Wall Street Journal

The company’s fourth-quarter results included an impairment charge of $1.4 billion related to the company’s store-closure plan.

CVS said it expected to post full-year 2022 earnings from continuing operations between $7.04 a share and $7.24 a share. On an adjusted basis, it expects earnings to come in between $8.10 a share and $8.30 a share.

It also widened its full-year cash flow from operations guidance range to between $12 billion and $13 billion.

Write to Will Feuer at [email protected]