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CVS Caremark earnings call: Don't sweat tobacco exit

  • Tobacco was a major topic during CVS Caremark's (CVS +2.9%) earnings call this morning.
  • Execs say the exit from the category will align the company with the goals of patients, clients, and providers.
  • Of note, 2014 EPS guidance and five-year financial targets are unchanged despite the new strategy which will send some customers to other retail chains.
  • The tone from management suggests that the company is already seeing a general trend toward pharmacy sales outpacing front-end sales so the tobacco play might be less dramatic than feared by some.
  • Earnings call webcast
Comments (8)
  • Rich in Long Beach
    , contributor
    Comments (4) | Send Message
    How can the guidence be unchanged? Sounds like they're smoking something else now.
    11 Feb, 11:32 AM Reply Like
  • Bouchart
    , contributor
    Comments (755) | Send Message
    I joked a few days ago that they would be replacing tobacco sales with marijuana sales.


    Wait for it.
    11 Feb, 11:42 AM Reply Like
  • J Mintzmyer
    , contributor
    Comments (3604) | Send Message
    Should be marginally better for RAD and WAG as people sometimes walk in off the street for a pack of smokes and pick up chips/soda/candy as well.


    Overall, it's probably a positive thing for them though. Brand image does matter-- probably a lot more than the marginal (0.5% of revs or less?) amount of tobacco sales.
    11 Feb, 01:24 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1227) | Send Message
    I think that there is a market for those consumers who are disgusted with the stench and the toll of tobacco. That market might be relatively small now, but I think it will be growing. Even if it only represents 2% of drug store consumer purchase revenues, that will more than make up for the lost tobacco business.
    11 Feb, 04:48 PM Reply Like
  • yzymmrb
    , contributor
    Comment (1) | Send Message
    I guess the candy, soda, and snacks will go next.
    11 Feb, 08:43 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1227) | Send Message
    This tired attempt to equate so-called "junk food" products, which can be had in moderation, with extremely deadly and highly addictive tobacco products seems to show up on each commentary page since the big news of last week. There is just no comparison.
    11 Feb, 10:42 PM Reply Like
  • 16178052
    , contributor
    Comments (6) | Send Message
    Wait till you discover the "stench and toll" of legalizing marijuana. I am NOT defending smoking! But as a smoker, I am always amazed at the attitude of the "hard core" anti-smoking group. They have no problem with booze or marijuana because they don't read the statistics on what is the OVERWHELMING cause of spousal abuse and crimes in the U.S. to say nothing of the innocent people killed in car accidents. Where is your righteous indignation about that?


    12 Feb, 08:50 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1227) | Send Message
    Speaking for myself, I do not think booze or marijuana are good for our society either.


    However, the established dangers of second-hand tobacco smoke does put that product in a specially noxious status in my opinion. Some individuals precious to me suffered from second-hand smoke.
    12 Feb, 09:14 AM Reply Like
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