CVS Health continues to struggle with retail pharmacyCVS Health continues to struggle with retail pharmacy

CVS continues to struggle with its retail pharmacy business, facing pressure from softer consumer spending coupled with lower reimbursements for prescription drugs, the retailer said in a fourth-quarter earnings call Wednesday. 

The retailer has closed some 900 stores over the past three years—a plan it first announced in 2021. On Wednesday’s earnings call, CVS Chief Financial Officer Tom Cowhey stressed that there would be “further footprint optimization” in 2025, but did not specify how many stores could be affected.

While overall sales topped estimates, CVS’ troubled insurance business continued to see higher medical costs in Q4. CVS did not provide a revenue forecast for the year.

The Woonsocket, R.I.-based retailer also issued a full-year 2025 adjusted earnings outlook of $5.75 to $6 per share on Wednesday—in line with Wall Street’s expectations.

As part of a larger turnaround effort, the company shook up its management team and set a goal to cut $2 billion in costs over the next few years, with longtime CVS executive David Joyner, who was named CEO in October, leading the charge. CVS has been dealing with rising expenses in its Aetna insurance unit, while its retail pharmacy business faces challenges from weaker consumer spending and lower prescription drug reimbursements.

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Total revenues increased to $97.7 billion in the retailer’s fourth quarter, up 4.2% year over year. CVS’ total revenues for the full year increased to $372.8 billion, also up 4.2% from last year. 

“We have continued to see growth in key areas of our business, including the Pharmacy and Consumer Wellness segment, while we address the industry-wide challenges that have impacted our Health Care Benefits segment,” Joyner said Wednesday.