A woman enters a CVS Covid-19 vaccine site in Monterey Park, California on April 27, 2021.
Frederic J. Brown | AFP | Getty Images
Karen Lynch, chief executive of CVS Health, said Wednesday that the peak of Covid-19 vaccinations was behind the company.
On a phone call, she said the drugstore chain had administered 30 million shots and was continuing to sell them in stores across the country. However, she said vaccination rates have slowed since April – although the delta coronavirus variant has led to a new surge in cases in parts of the country with a large unvaccinated population.
The company lowered its outlook for the number of vaccines it plans to deliver this year after the number of vaccines delivered fell below company expectations in May and June, CVS CFO Shawn Guertin said in the call. However, the retailer raised its overall guidance for the year.
CVS issued a vaccination update, sharing second quarter results during a turning point in the coronavirus pandemic. More than 70% of adults in the US have now received at least one dose of a Covid vaccine, but cases are rising rapidly in states like Florida and Texas, where vaccination rates remain low. The seven-day average of daily coronavirus cases in the country is now higher than last summer’s peak – a time the U.S. didn’t yet have an approved Covid vaccine.
The rising cases, fueled by the delta coronavirus variant, have led some retailers to reintroduce mask requirements, companies to require vaccinations and politicians to announce new safety measures. It has also created new uncertainty as companies attempt to bring workers back to the offices and make profit forecasts.
Drug store competitor Walgreens Boots Alliance announced Wednesday that vaccination rates have increased in recent weeks in lagging states like Alabama, Florida, Georgia and Kentucky. It said it had administered more than 29 million Covid vaccines in its stores.
Guertin said CVS is still trying to understand what the Delta option could mean for its business, which includes the acquired health insurer Aetna. He said booster vaccination was not included in the full-year outlook and included a limited contribution from pediatric vaccines.
CVS posted higher profits in the second quarter of last year compared to last quarter as healthcare facilities canceled elective surgeries to release hospital beds. Some have started to cancel these medical procedures again – but it’s too early to say how widespread that will be, Guertin said.
He said vaccinations were down in July compared to the previous month, but there had been an increase as the Delta variant inspires some people to get their first doses. Covid testing and in-store retail sales have remained strong, he said.
However, he said the company’s Covid-related costs have also been higher than expected on the company’s health benefits side – an expense that persists as more people need treatment.
Ashtyn Evans, a stock analyst at Edward Jones, said she doesn’t expect CVS to see the same levels of cost savings and revenue growth during this wave of pandemics. For example, she said, customers are unlikely to re-accumulate large supplies of prescriptions and health products. Plus, Evans said, elective surgeries, even if they are slow, can only be postponed for so long. She said the company would also face higher medical costs if more people were hospitalized for Covid-19.
Going forward, Evans said, CVS needs to drive growth and increase profits in other ways – e.g.
– Reuters contributed to this report.