The drugstore business continues to be successful for its major players.
In the past couple of weeks, we heard from Walgreen (NYSE:WAG) and its impressive comps and earnings results. Last week, we heard about the sales performance of its main competitor, CVS/Caremark (NYSE:CVS). You perceptive readers no doubt noticed the addition to the company's name. We'll touch on that in a bit, but first, let's look at its March results.
Much like Walgreen, CVS (I refuse to type out its new full name) continues generating strong sales growth. In March, its overall sales soared 23.3% to $4.8 billion. Pharmacy sales accounted for just under 70% of the total. Its same-store sales were also strong, increasing 7% as pharmacy comps were up 7.5%, but were hurt by generic sales. Shoppers were also looking for candy and other goodies to go with their meds, pushing front-end comps 5.9% higher.
As I mentioned above, CVS continues its approach of growing through acquisition. On March 22, CVS completed its merger with Caremark, forming a pharmacy services provider behemoth. It's obviously way too early to say what kind of impact this will have on the overall business. However, there is certainly concern that CVS is taking on too much these days.
Despite its rapid growth, I'm not overly worried about the approach CVS is taking. It seems to be integrating its acquisitions without slowing down, and I see no reason to think its latest deal will be any different.
Each of the major drugstores (Rite Aid (NYSE:RAD) being the other) has certainly made investors very happy of late. Despite the fact that the retailers continue to battle each other for shoppers, sales for all continue to climb. Luckily for each, we all continue to grow older and more dependent on prescriptions, which means the growth trend should continue for quite some time.
To learn more about the drugstore wars, read:
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Fool contributor Mike Cianciolo welcomes feedback and doesn't own share in any of the companies in this article.
