CVS Health on Wednesday said that first quarter revenues increased 34.8% to $61.6 billion from $45.7 billion in the year-ago quarter. Net income rose to $1.4 billion from $998 million a year ago, according to a company press release.
In its retail segment, the drugstore saw revenue rise 3.3% to $21.1 billion from $20.4 billion in the year-ago quarter. Front store revenues represent about 22.7% of total retail segment revenues, which include sales of prescription medications, patient care services, general merchandise, and health care services through walk-in clinics and long-term care facilities.
Front store comp sales rose 0.4% in the quarter, compared to the year-ago quarter's 1.6% rise, according to the company's Securities and Exchange Commission filing for the period. The company plans to close 46 underperforming retail pharmacy stores in the second quarter, according to that filing.
CVS Health's report Wednesday represents the first full quarter that includes results from its Aetna health insurance acquisition, a huge step in its evolution from a drugstore retailer to a more integrated health care company. Its newest retail concept, its pilot HealthHUB stores, are oriented to consumer health care needs.
The retailer is exploring various retail innovations at those stores, which CEO Larry Merlo again described as "a hub-and-spoke concept." Those hubs are among the company's new brick-and-mortar efforts now that it owns health insurer Aetna outright, although they aren't limited to Aetna subscribers.
Merlo said Wednesday that stores are integral to the company's operations, despite the broader move in health care to communicate with patients on mobile, because of the opportunities that stores provide to interact directly with the customer.
On a morning conference call with analysts, executives also said that many customers are taking advantage of its new Shipt-enabled same-day delivery.
Beauty and wellness are natural categories for a retailer undergoing such a pivot in emphasis, and CVS has amplified those sales with a store-within-a-store concept called BeautyIRL, which it started testing last year. Walgreens, with a tie-up with Birchbox and other efforts, and other rivals are making similar moves, according to a Coresight report emailed to Retail Dive on Wednesday. CVS's health and beauty sales are bringing customers into stores, executives told analysts on Wednesday. But overall the company has been slow to improve the appeal of the front of its stores, according to previous notes from Neil Saunders, GlobalData Retail managing director.