Drugstore chain CVS cut its full-year profit forecast due to slowing prescription growth and the loss of contracts to rivals, including one servicing the U.S. military. Bobbi Rebell reports.
Drugstore chain CVS slashed its profit outlook, and the news hammered the stock on Tuesday. To blame - slowing prescription growth and the loss of contracts to rivals, including one servicing the U.S. military. The news overshadowed solid earnings. Jeff Tomasulo of Vespula Capital: (SOUNDBITE) JEFF TOMASULO, CEO AND FOUNDER AT VESPULA CAPITAL LLC, (ENGLISH) SAYING: "CVS performed extremely well this quarter, but there is fear because of the competition that is happening. Right now, we have a merger going on between Rite Aid and Walgreens. It's not approved by the federal government yet, but, once it's approved, it's gonna, actually, increase the number of stores. Walgreens will have about 12,500 stores versus CVS' stores at 9500. But also this year, Tricare, an insurance program for all active and retired military people, just decided to leave CVS and join Walgreens." CVS said it expects to lose more than forty million retail prescriptions in 2017.