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WOONSOCKET, R.I. - CVS Corp. said strong sales of pharmacy products and other "front end" goods helped it report a 17.7 percent increase in second-quarter profit.
For the quarter ended July 3, sales reached $6.94 billion, up from $6.44 billion a year ago. Same-store sales increased 6.1 percent, while pharmacy sales rose 7 percent.
"We had healthy sales growth as the front-end regained momentum and gross-margin performance was better than expected," said Tom Ryan, CVS's chairman, president, and chief executive. He said the results show the company's core business is thriving.
During the quarter CVS opened 22 stores, including its entrance to the California marke; closed three stores; and relocated 17 locations. At the end of the quarter it operated 4,206 stores in 32 states and Washington, D.C. The company is in the process of integrating the 1,260 Eckerd stores it purchased, primarily in the South, from J.C. Penney Co. for $2.15 billion in cash. CVS now says it expects to close fewer than 200 of the Eckerd stores, down from the 225 stores it initially projected it would close. By the end of the year it expects to operate 5,400 stores, surpassing Walgreens as the nation's largest drug chain.
Eckerd Corp. has announced it plans to lay off about 1,400 management and support workers at its Florida headquarters, starting this month.
For the first six months of the year, CVS earned $471.8 million, or $1.15 a share, up from $388.8 million, or 97 cents a share, a year ago. Six-month revenue rose to $13.76 billion from $12.76 billion a year earlier.