Recently, CVS/pharmacy, the retail division of CVS Caremark Corporation (CVS), collaborated with Eastman Kodak (EK) to make Social Network Connectivity available at all CVS/pharmacy Photo Centers with Kodak Picture Kiosks. Effective immediately, this new feature will allow CVS/pharmacy customers to print images directly from social networking site Facebook without the help of digital camera, USB drive or smartcard into the store. With almost 140 billion photos already there on Facebook and approximately 200 million uploaded daily, this new feature will enhance the company’s marketing campaign.
CVS is the largest provider of prescriptions and related health care services in the US. The company, one of the largest domestic integrated pharmacy service providers, operates through two business segments, Retail Pharmacy and Pharmacy Services.
The Retail Pharmacy segment sells prescription drugs and general merchandise (front store products), which includes over-the-counter (OTC) drugs, greeting cards, film and photo finishing services, beauty and cosmetic products and convenience food through the company’s stores as well as at CVS.com (the company’s online store).
The company also operates retail health care clinics under the MinuteClinic brand. These clinics, which are staffed by nurse practitioners and physician assistants, aim to treat minor health conditions, perform health screenings, monitor chronic health conditions and offer routine vaccinations. These remain open throughout the week and do not require prior appointment, thus discouraging unnecessary and expensive emergency room visits.
At the end of second quarter 2011, the retail segment operated 7,346 locations including 7,226 retail drugstores, 31 specialty pharmacy stores, 32 apothecary pharmacy stores, 13 specialty mail order pharmacies and 4 mail order pharmacies in 44 states including the District of Columbia and Puerto Rico.
Sales from the Retail Pharmacy segment recorded a 3.6% year-over-year growth to $14.8 billion during the last reported quarter with a 2.0% increase in total same-store sales. While pharmacy same-store sales rose 2.6%, front-end same-store sales increased marginally by 0.8%. The company expects the segment to deliver higher sales (3%−4%) and operating profit (7.5%−9%) for 2011 with a 0.5%−2.5% rise in same-store sales. Moreover it should drive benefits from its streamlining initiatives. Currently, CVS retains a Zacks #2 Rank, which translates to a short-term Buy rating. However, over the long term, we remain ‘Neutral’ on the stock, at par with Eastman Kodak.
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