February 9, 2016 / 12:07 PM / 4 years ago

CVS Health forecasts first-quarter profit below estimates

(Reuters) - CVS Health Corp (CVS.N), the No.2 U.S. drugstore chain by store count, forecast current-quarter profit below analysts’ estimates as customer traffic to its retail stores slows.

People walk outside a CVS store in Pasadena, California, August 3, 2015. REUTERS/Mario Anzuoni

Shares of the company, which sells items such as personal care products, over-the-counter drugs and snacks at its retail stores, fell 2.4 percent in premarket trading on Tuesday.

CVS’s comparable sales at these stores declined 5 percent in 2015, which the company attributed to its decision to discontinue sales of tobacco products.

Research firm Conlumino’s Chief Executive Neil Saunders, however, said the argument now held much less weight and CVS’s “front of house offer simply isn’t compelling or engaging enough.”

“...Over a holiday period in which sales of beauty and personal care products were robust, CVS is losing ground and losing share,” Saunders said.

Comparable sales in CVS’s pharmacy benefits management business rose 4.5 percent in 2015.

The company forecast an adjusted profit of $1.14-$1.17 per share for the first quarter, below the average analyst estimate of $1.18, according to Thomson Reuters I/B/E/S.

The net income attributable to CVS rose 13.4 percent to $1.50 billion, or $1.34 per share, in the quarter ended Dec. 31.

Excluding items, the company earned $1.53 per share, in line with the average analyst estimate.

Net revenue rose 11 percent to $41.15 billion, narrowly beating the average estimate of $41.13 billion.

CVS shares were trading at $87.50 before the bell.

Reporting by Subrat Patnaik in Bengaluru; Editing by Kirti Pandey

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