CVS Health is closing nearly two dozen stores that are underperforming, the company announced in its third quarter earnings released Nov. 6. The store closings also coincide with a 10% jump in profit for the quarter for CVS, to $1.52 billion.
The 22 retail pharmacy stores will be closed during the first quarter of 2020. Operating income rose 13.8% compared to the third quarter of 2018. The earnings report come nearly a year after CVS Health acquired Aetna in a deal valued at $69 billion.
"Our third quarter results build on the positive momentum we have seen across the company since the beginning of the year,” CVS Health President and CEO Larry Merlo said in a statement. “All of our core businesses performed in line with or above expectations, reflecting strong operational execution.”
CVS Health’s upcoming store closures underscore a market reality: consumers are finding more choices for pharmacy needs and brick-and-mortar stores are feeling more competition. CVS rival Walgreens also recently announced it would close its owned and operated in-store clinics and is also rumored to be in talks to go private in a major deal. Walgreens also previously announced plans to close hundreds of stores. CVS Health operates nearly 10,000 retail locations.
In the reported third quarter earnings, CVS Health also raised and narrowed its guidance for the 2019 full year, to between $11.82 billion and $12.02 billion in operating income.
“As we approach the first anniversary of the Aetna acquisition, we are increasingly confident in the strength of our broad and differentiated assets as a combined company and our ability to deliver compelling value to our customers and the communities we serve,” Merlo said. “Looking ahead, we remain focused on successful execution of our strategic priorities and integration plans to unleash the full potential of our consumer-centric health care model and create value for all stakeholders."
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."