CVS Health reports mixed results in Q3

CVS missed the mark on its third quarter profit, but posted strong sales overall under the very new leadership of CEO David Joyner, who took the helm last month following a continued struggle from the retailer to deliver on higher profits and improved stock performance.

Shares of CVS rose more than 10% in premarket trading Wednesday. But overall this year, shares of the company are down nearly 27%—a statistic the pharmacy giant attributes to higher medical costs.

On Wednesday, during the company’s third quarter earnings call, CVS announced that third quarter total revenues increased to $95.4 billion, up 6.3% compared to the prior year. CVS attributed this growth to its pharmacy and consumer wellness segments. Overall, the retailer said it remains cautious in terms of its outlook for front store sales, which have been pressured in recent quarters.

CVS also named two new roles during Wednesday’s call: a new president for its health insurer, Aetna, Steve Nelson, the former CEO of UnitedHealthcare. Nelson starts his new role immediately. 

Longtime company executive Prem Shah will also take on a new, expanded role overseeing the company’s retail pharmacy, pharmacy benefits, and health-care delivery businesses.

On an adjusted basis, earnings per share totaled $1.09, falling short of the average Street forecast of $1.44 per share. Revenue rose 6.3% to $95.43 billion, which topped analysts’ estimates of $92.72 billion.

Related:Costco sets records during Q1 and beyond

By the end of November, CVS will aim to complete its previously announced three-year store optimization initiative targeting 900 stores, Joyner said on Wednesday. He also referenced the retailer’s recently announced plan to close approximately 270 stores in 2025. Not long before that, the retailer announced it would lay off 2,900 workers in an effort to cut costs.

CVS’ insurance business saw $33 billion in revenue during the quarter, up more than 25% from the third quarter of 2023. The retailer’s total health services segment generated $44.13 billion in revenue for the quarter, down some 6% compared with the same quarter in 2023.