CVS increases quarterly dividend by nearly 43%
WOONSOCKET, R.I. — Marking its eighth consecutive year of dividend increases, CVS Caremark on Tuesday said its board of directors approved a near 43% increase of its quarterly dividend to 12.5 cents per share of common stock.
The dividend is payable Feb. 2 to holders of record on Jan. 21.
At its Analyst Day in October 2010, the company announced that it set a targeted dividend payout ratio of approximately 25% to 30% by 2015, which implied a compounded dividend growth rate of nearly 25% per year.
"This substantial increase reflects our solid financial performance, our optimism with respect to future growth and our very significant cash generation capabilities. We remain committed to using our free cash flow to enhance total returns for our shareholders, through a combination of high-return investments, dividend increases and value-enhancing share repurchases," said Dave Denton, CVS Caremark EVP and CFO.
Many Americans still haven’t received their flu shot
WOONSOCKET, R.I. — Despite an increase in flu activity, a recent CVS/pharmacy survey showed that 56% of respondents still had not received their flu shot, although 93% were aware that there already have been reported cases of the flu this season, the pharmacy retailer stated.
Flu activity steadily is increasing in the United States, with eight states now having reported widespread outbreaks of influenza cases, according CVS/pharmacy, which cited the most recent Centers for Disease Control and Prevention report.
According to the CDC, the month with the highest percentage of flu cases (nearly 50%) is February. Yet many consumers are unaware that the highest risk month is just ahead. The CVS/pharmacy Flu Review survey revealed that 32% of respondents thought the flu season peaked in November and December, and more than one-third (37%) incorrectly believed getting the flu shot can give you the flu, when, in fact, the injectable influenza vaccination contains inactive viruses that cannot give you the flu.
"If you haven’t already received a flu shot, it’s not too late," stated Papatya Tankut, VP pharmacy professional services at CVS/pharmacy. "Since the vaccine takes up to two weeks to become effective, it’s important to act now so you’ll be protected in February, when most flu cases are generally reported."
Licensed pharmacists are available to vaccinate at all 7,100 CVS/pharmacy stores, and flu shots can be scheduled in store or by using the online flu shot scheduler at CVS.com/flu. At more than 500 MinuteClinic walk-in medical clinics located inside select CVS/pharmacy stores in 26 states and the District of Columbia, flu vaccines are available on demand without an appointment, and are administered daily by nurse practitioners and physician assistants.
This year, only one vaccine is required for protection against three influenza strains, including the H1N1 virus and the seasonal H3N2 virus. The CDC is recommending for the first time that anyone ages 6 months or older get a flu shot.
MinuteClinic nurse practitioners can vaccinate patients who are 18 months or older, except in Massachusetts where the minimum age is 24 months of age. All CVS/pharmacy stores can issue flu shots to parties 18 years of age and up. For parties younger than 18 years, the minimum age for vaccinations by a pharmacist varies by state.
Kmart up, Sears down in December
HOFFMAN ESTATES, Ill. — A 2.3% same-store sales gain at Kmart was not enough to offset a 6% decline at Sears, resulting in an overall 1.7% decline for the combined companies’ domestic operations during the five-week December reporting period ended Jan. 1.
The December results were released as parent company Sears Holdings updated its earning guidance for the quarter ending Jan. 29, and indicated profits per share would exceed analysts’ consensus estimate of $3.09 and fall in a range of $3.39 to $4.12, with net income between $370 million and $450 million. For the fourth quarter to date, Kmart’s same-store sales were up 3.4%, while Sears was down by 5.3%. Last year, fourth-quarter profits were $3.74 per share, or $430 million.
The quarter-to-date gain at Kmart is attributable to the layaway program and strength in such categories as toys, home, sporting goods, apparel and footwear, according to the company. However, those increases partially were offset by declines in the food and consumables and pharmacy categories.
The sales difficulties seen at Sears are the same as those affecting other retailers, with significant exposure to the consumer electronics category and televisions in particular. Price deflation and moderating sales of existing flat-panel sets, coupled with a slow uptake of newer technologies, has hindered sales growth at Best Buy, HH Gregg and Target. Over half of the decline at Sears occurred in consumer electronics category, but appliances and tools also experiencing declines, according to the company. Conversely, Sears said footwear, jewelry and automotive categories produced comparable-store sales growth during the quarter-to-date period.
The company also updated its financial position and said it expects to end the year with approximately $1.1 billion in net cash balances and no outstanding borrowings under its $2 billion domestic credit facility. Sears Holdings plans to report its fourth-quarter and full-year results before the market opens on Feb. 24.
Improved profits during the fourth quarter will be offset by losses earlier in the year, which results in the company reporting full-year net income between $130 million and $210 million, or between $1.16 and $1.88 per share. Last year, net income totaled $235 million or $1.99 per share.