CVS Health to Close 22 Drugstores for This Reason
Author By Sophia VidaPosted on After closing 46 drugstores earlier this year, CVS Health will be closing another 22 drugstores early next year due to them under performing.
The company announced the news in a regulatory filing this week but did not disclose the locations of the stores.
CVS had also this week recorded a $96 million impairment charge on its third-quarter earnings related to the 22 stores. It recorded a $135 million charge in the first quarter due to the 46 stores it closed during the second quarter.
“We believe these decisions will generate enhanced longer-term performance,” Chief Financial Officer Eva Boratto told analysts Wednesday on a call reviewing third-quarter results.
He added, “Our real estate footprint remained very productive, and we will look for opportunities to further improve
the performance in our portfolio.”
Rival Walgreens earlier this year said plans to close 200 stores.
CVS CEO Larry J. Merlo said on the earnings call, “In the third quarter, we continue building on our positive business momentum delivering adjusted earnings per share of $1.84, exceeding the high end of our guidance range. Importantly, this performance was driven by strong operational execution across our enterprise with all three segments performing in line with or above our expectations. And I’ll note that $0.04 of our Q3 performance was the result of net realized capital gains and favorable prior-years development. We generated strong cash flow from operations, which enabled us to continue to make progress on deleveraging, all while investing in our core businesses and returning capital to our shareholders through dividends. Given our year-to-date success in executing against our strategic plan, we are raising and narrowing our adjusted earnings per share guidance range to $6.97 to $7.05. And Eva will provide a more in-depth review of our results and increase guidance in her remarks.”
Disclaimer: We have no position in CVS Health Corp. (NYSE: CVS) and have not been compensated for this article.
