CVS Caremark Corp., No. 118 in the 2020 Digital Commerce 360 Top 1000, says the effects of the COVID-19 pandemic helped drive increased revenue, higher profit and increased digital engagement in the first quarter.
Total revenue increased 8.3% to $66.75 billion for the quarter ended March 31, up from $61.65 billion for the same quarter last year. Income rose 41.5% to $2.01 billion for the quarter compared with $1.42 billion a year earlier.
In a May 6 conference call with analysts, CEO Larry Merlo said CVS saw higher levels of engagement across its digital assets during the first quarter—a trend that began in January and accelerated as the COVID-19 pandemic progressed.
Online prescriptions orders were up more than 1,000% for the quarter, Merlo said. CVS also had a four-fold increase in the number of consumers adding general merchandise items to their prescription deliveries.
CVS also had a double-digit year-over-year percentage increase in mobile app use, Merlo said. As an example, he said, digital refills in the specialty pharmacy category in the app were up about 50%.
The COVID-19 pandemic—which resulted in greater use of 90-day prescriptions and early refills of maintenance medications, as well as increased nonprescription volume—contributed to the increased revenue, CVS said. Higher net income was primarily because of the higher operating income and lower interest expenses, mostly due to lower average debt in the three months ended March 31.
- Ecommerce at children’s apparel retailer Carter’s Inc. (No. 87) more than doubled in recent weeks, according to CEO Michael Casey in a call with investors transcribed by Seeking Alpha. He didn’t give an exact breakdown, but said ecommerce both directly to consumers and to wholesalers helped to offset an overall slowdown in earnings for its first fiscal quarter ended March 28. Overall sales decreased 11.7% to $654.5 million from $741.1 million a year prior. Carter’s Canadian ecommerce sales grew 25% for the quarter, and rose 170% during the first weeks of the second quarter.
- Office supply chain Office Depot Inc. (No. 20) reported a 26% increase in buy online pick up in store orders for the first fiscal quarter ended March 28. Comparable retail sales grew 2% but overall retail sales fell 1.7% due to store closures.
- TV channel owner Qurate Retail Group (No. 9) reported a 4.4% decline in ecommerce sales for the first fiscal quarter ended March 31. Sales fell to $1.73 billion from $1.81 billion, led by a 20.4% decline at online-only Zulily. The only ecommerce growth came from QVC International, which posted a 5.6% increase due to favorable currency exchange rates, but revenue dropped when compared against a constant currency exchange rate. Online sales in Japan showed strength for the segment while UK and German online revenue slipped. QxH declined 0.9% while Cornerstone shrank 8.9%.
- For athleticwear brand Under Armour Inc. (No. 89), total revenue declined 22.5% in Q1 to $930.24 million from $1.20 billion in Q1 2019. Roughly 15 percentage points of the decline is related to the COVID-19 pandemic, the company says. Direct-to-consumer revenue, which includes ecommerce and sales from its 788 retail stores, declined 14% to $284 million. The rest of its revenue comes from wholesale, which declined 28% to $592 million. Executives didn’t disclose ecommerce growth, but on a call with investors discussing the results they said ecommerce picked up in early April and has continued through May.
- Apparel department store Nordstrom Inc. (No. 18) is closing 16 stores, a move CEO Erik Nordstrom says will be counteracted by consumers moving to more online shopping during the pandemic. Already, more than half of store sales involve its website and a third of ecommerce orders involve stores, the company said in a press release. Ecommerce sales represented one-third of total sales for the retail chain.
Bloomberg contributed to this report.
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