No. 2 drugstore chain CVS
Revenues for the year improved 10% to a remarkable $26.59 billion, as same-store sales rose a solid 5.8%. Significant margin improvements -- gross margins jumped from 21% to 23%, while operating margins rose to 5.6% from 4.9% a year ago -- helped drive net income up nearly 18% to $847 million, or $2.07 per share. (CVS deserves credit for clearly stating the impact an extra week had on profits. Too many companies will mention that only when they had a shorter year and lower profits.)
The company continues to grow: It opened 150 stores during the year, closing 58. Internal controls, meanwhile, appear to be working: Exhibits A and B are the margin improvements mentioned above, while Exhibit C is the company's claim that inventory turns, which came in at 4.9 -- up from 4.6 last year (higher is better) -- beat internal targets for the year. (CVS also deserves credit for providing a balance sheet and cash flow statement along with the income statement in its earnings release.)
The good news appears to have continued into January, during which revenues improved 6.9% to $2.04 billion, and same-store sales rose 5.6% year over year.
Given the company's sustained performance, it's not surprising that its shares have outpaced the S&P 500 over the last 12 months. Investor attention continues to focus on the sector, with leader Walgreen
Talk about CVS' remarkable run of results on our CVS discussion board.
Dave Marino-Nachison doesn't own any of the companies in this story. He can be reached via email.