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May 4, 2021

CVS raises forecast as COVID shots, tests offset weak flu season

Ontario government will want more vaccines in pharmacies: Shoppers Drug Mart president

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CVS Health Corp. raised its full-year forecast as COVID-19 vaccines and testing helped boost first-quarter results and offset a weak cold and flu season.

The health-care company gave 17 million COVID shots at long-term care facilities and at its pharmacies through April. CVS is now immunizing in about 8,300 locations in 49 states, Chief Executive Officer Karen Lynch said Tuesday on a call with analysts.

With about 9,900 locations nationwide, CVS has administered some 23 million virus tests, including 9 million in the first quarter. Company executives said vaccines and testing are already attracting foot traffic, pointing to a statistic that about 9 per cent of new customers who received a test through CVS filled a new prescription with the pharmacy.

“Rising to meet the challenge of COVID-19 has advanced the transformation of the health-care industry,” Lynch said. “For CVS Health, the chance to serve our nation at such a critical time has further proven the value of our strategy.”

Adjusted net income for 2021 will be US$7.56 to US$7.68 a share, CVS said in a statement, up from an earlier range of US$7.39 to US$7.55. Adjusted earnings were US$2.04 a share, beating the US$1.71 expected by Wall Street analysts. Revenue of US$69.1 billion also exceeded analysts’ average estimate.

Shares of CVS rose as much as 2.4 per cent as of 9:23 a.m. in New York. Through Monday’s close, the stock had gained 14 per cent this year.

The boost from tests and vaccines helped offset some of the challenges facing CVS’s retail business. Sales in the front of the store, where drugstore items are sold, slid 11 per cent year-over year. A weak cough, cold and flu season, coupled with the pandemic’s contagion precautions, kept some customers out of its stores.

Both CVS’s pharmacy-benefits manager Caremark and its health insurer Aetna posted year-over-year increases in revenue. The company opened about 250 new Health Hubs, or health-centric stores, in the quarter, bringing the total to about 800, Lynch said. CVS expects to have about 1,000 by the end of the year, she said.