CVS Health said Thursday that it sees sales growth accelerating as it expands the services it offers at its drugstores and people’s homes to make health care more affordable and easier for customers.
Shares of the company are up more than 3% in premarket trading.
The drugstore chain and health insurer projected that adjusted earnings per share will be between $8.10 to $8.30 on total revenues of between $304 billion to $309 billion in fiscal 2022.
It also boosted its forecast for this fiscal year, saying it expects adjusted earnings per share to be at least $8.00 on revenue of $290.3 billion or more. That’s an increase from a previous forecast for adjusted earnings of $7.90 to $8.00 per share and revenue of $286.5 billion to $290.3 billion.
CVS announced its new forecast ahead of an investor day on Thursday morning. It marks the first investor day since the start of the pandemic and since the company’s new CEO Karen Lynch stepped into the top role.
CVS has been weaving together its numerous drugstores, pharmacy benefit manager Caremark and insurance company Aetna to try to drive more business. On Thursday, the company said it will talk about plans for new health products and services, including subscription models and home health care. It said it will share details about how it can reduce costs and improving health outcomes for people with chronic conditions like diabetes and congestive heart disease, such as those who have Aetna insurance and fill prescriptions at CVS pharmacies.
As part of that vision, CVS recently said that it planned to close about 900 stores over the next three years or roughly 9% of the retailer’s total U.S. footprint. Going forward, it said it would have three different kinds of stores — including two formats that make health-care services more front and center.
CVS said Thursday that it would also resume share buybacks and increase its dividend. It marked the first time that the company has done that since 2017, when it announced the acquisition of health insurance company Aetna. It said it will raise its annual dividend by 10%, from $2.00 to $2.20, effective with the next distribution on Feb. 1. It has approved a $10 billion share buyback program.
As of market close on Wednesday, shares are up 36% this year. CVS shares closed Wednesday at $93.10. The company’s market value is $122.85 billion.
CVS Health’s investor day begins at 8 a.m. Please check back for updates to this story throughout the day.