10-KPeriod: FY2002

CVS HEALTH Corp Annual Report, Year Ended Dec 28, 2002

Filed March 18, 2003For Securities:CVS

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.

Frequently Asked Questions

CVS Corporation's primary business focus is the retail drugstore industry, operating a large chain of pharmacies that offer prescription drugs and a wide assortment of general merchandise. They also have a significant Pharmacy Benefit Management (PBM) division called PharmaCare Management Services.

In fiscal year 2002, CVS Corporation reported a strong financial performance with net sales of $24.2 billion and net earnings of $716.6 million, a significant increase from the previous year. Diluted earnings per share were $1.75, up from $1.00 in 2001.

CVS Corporation's growth strategy includes opening new stores in existing and new markets and relocating existing stores to more convenient locations. For customer engagement, they leverage their ExtraCare loyalty program, which has 33 million members, and focus on offering unique private label products and innovative services like their EPIC pharmacy system and online retail presence (CVS.com).

Yes, CVS Corporation is defending against a consolidated securities litigation case filed in the U.S. District Court for the District of Massachusetts. The company believes the action is without merit and intends to defend itself vigorously. Other litigation arising in the normal course of business is not expected to be material.