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WOONSOCKET, R.I. - No. 2 U.S. pharmacy chain CVS Corp. on Tuesday said total sales in the third quarter increased 8.6 percent, Reuters reports.
The drug chain forecast third-quarter profit would be at the high end of its guidance of 37 cents to 39 cents a share, sparking a surge in drugstore stocks on hopes that sales could be starting to recover.
CVS share rose 13 percent to $27.32 in early trading on the New York Stock Exchange, where shares of No. 1 U.S. pharmacy chain Walgreen Co. and No. 3 Rite Aid Corp. also traded higher.
CVS has been stepping up marketing and has made cutting expenses and improving customer service a priority. Total sales in the third quarter ended Sept. 28 increased 8.6 percent, to $5.88 billion from $5.41 billion a year earlier. Sales from stores open at least a year, or same-store sales, increased 8.3 percent in the five-weeks ended Sept. 28. The rise compared with a 7.9 percent CVS reported for its August same-store sales.
Although investors regard drugstores as resistant to economic downturns, their businesses have come under pressure from fierce competition from other sellers of prescription drugs, including supermarkets and large discount stores.
But CVS Chairman, President and CEO Tom Ryan said in a statement that: "CVS is achieving healthy sales growth, improving gross margin performance, and continued solid expense control."
CVS said same-store sales in the higher-grossing general merchandise segment increased 0.4 percent in the five-week September selling period, while pharmacy same-store sales increased 12.3 percent.
Rite Aid reported September same-store sales up 8.7 percent, while Walgreen last week said its same-store sales increased by 11.8 percent. Rite Aid shares rose 8 percent or 16 cents to $2.14, while Walgreen added 3.23 percent or $1 to $31.96.