By Matt Andrejczak
SAN FRANCISCO (Dow Jones) - CVS Caremark Corp. reported Thursday
fourth-quarter profit rose 17% on strength in its retail business
and announced financial chief David Rickard plans to leave the No.
1 U.S. drug-store chain later this year.
CVS shares rose 6% in midmorning trading. Profit and sales
topped analyst expectations and the company reiterated its 2009
growth targets that it had tempered last month.
The Woonsocket, R.I. drug retailer said net income was $952.8
million, or 65 cents a share, up from net income of $815 million,
or 55 cents a share. Revenue rose 10% to $24.1 billion.
CVS (CVS) operates 6,900 stores across the nation and fills the
most drug prescriptions nationwide. It acquired Longs Drug Stores
last fall, adding 529 stores in California, Arizona, Hawaii and
Nevada.
The drug chain said sales at stores open more than a year - or
same-store-sales, a key barometer of retailer health - rose 3.6%
over the prior year. Pharmacy same-store sales rose 4.5% and
front-end cash register sales rose 1.8% for the quarter ended Dec.
31.
CVS said sales of its store-brand products rose 16% in the
quarter as cash-strapped consumers shopped for bargains. "Our
proprietary brands are increasing as we continue to strengthen our
offerings and in this economy, consumers are more willing to try
private label products," CVS Chief Executive Tom Ryan said in a
conference call.
CFO Rickard said he is retiring a year ahead of schedule. He has
been with CVS since 1999, helping Ryan orchestrate the company's
rapid growth through acquisitions, most notably the blockbuster
deal that merged CVS with pharmacy-benefits provider Caremark. CVS
plans to look for internal and external candidates to fill his
shoes.
"I've reached a point in my life where I've accomplished
everything I want to from a career and financial perspective," said
Rickard, listed as 61 years old on the CVS web site. "Now I have
some personal goals I'd like to tackle and I want to get on with
them while I still have plenty of energy."
CVS shares climbed to $28.85 in late morning trading. The shares
have lost 28% over the past 12 months, compared to the 42% drop for
the S&P 500.
