Summary
CVS Corporation, as of its fiscal year ended December 28, 2002, stands as a leading U.S. retail drugstore chain, reporting net sales of $24.2 billion. The company operated 4,087 retail and specialty pharmacy stores across 32 states and the District of Columbia, solidifying its position as the largest retailer by store count. Its business is primarily segmented into Retail Pharmacy, which accounts for approximately 95% of sales and operating profit, and Pharmacy Benefit Management (PBM) through its PharmaCare Management Services division. The company's operating strategy emphasizes convenience, service, innovation, and technology, aiming to be the easiest pharmacy retailer for customers. Financially, CVS reported net earnings of $716.6 million on a diluted per share basis of $1.75 for the fiscal year 2002, a significant increase from $413.2 million ($1.00 per share) in 2001. This growth was accompanied by an increase in total assets to $9.6 billion and total shareholders' equity to $5.2 billion. The company continues to invest in store development, opening 174 new stores and relocating 92 in 2002, with plans for further expansion. Key to its strategy is the ExtraCare card program, boasting 33 million members, and a strong emphasis on private label products, representing approximately 12% of front store sales.
Key Highlights
- 1CVS Corporation reported net sales of $24.2 billion for the fiscal year ended December 28, 2002, operating 4,087 retail and specialty pharmacy stores.
- 2Net earnings increased substantially to $716.6 million in 2002, up from $413.2 million in 2001, with diluted EPS rising to $1.75 from $1.00.
- 3The company's primary segment is Retail Pharmacy, contributing approximately 95% of consolidated net sales and operating profit.
- 4CVS expanded its store base in 2002 by opening 174 new stores and relocating 92, with plans to open 150-175 new stores in 2003.
- 5The ExtraCare loyalty program is a significant customer engagement tool, with 33 million members.
- 6Pharmacy sales represented a growing portion of net sales, reaching 67.6% in 2002, driven by an aging population and favorable industry trends.
- 7The company faces a consolidated securities litigation case, but believes it is without merit and intends to defend vigorously.