With eight months of data under their belts, CVS Health is seeing strong performance out of its early HealthHUB retail stores in the Houston area.
CEO Larry Merlo said on the company's earnings call Wednesday morning that these concept stores, which dedicate more than 20% of retail space to health services, outperform control retail pharmacies in script volume, MinuteClinic visits, front store sales, foot traffic and store margin.
"Our approach is certainly resonating in the marketplace," Merlo said.
CVS' "rapid rollout" of the HealthHUB stores is proceeding on track, he said, with the healthcare giant expanding into three additional metro areas by the end of this year. CVS plans to transform 1,500 of its stores into HealthHUBs by 2021.
Merlo said that these concept stores have several key value drivers, including that they meet patients where they are, they boost satisfaction and can offer services that are integrated with the pharmacy and the patients' health plan, if they're an Aetna member.
"A key differentiator of our retail stores is out ability to meet members and consumers where they are," he said.
CVS saw a 10% profit boost year-over-year in the third quarter thanks, in part, to Aetna's financial performance. CVS posted $1.52 billion in profit for the quarter, up $139 million from the third quarter of 2018. The healthcare giant also beat Wall Street expectations for third-quarter revenue, bringing in $64.8 billion.
That marks a substantial revenue increase of nearly 50% from the same quarter the previous year when CVS reported $47.5 billion in revenue.
“Our third-quarter results build on the positive momentum we have seen across the company since the beginning of the year," Merlo said in an earnings release. "All of our core businesses performed in line with or above expectations, reflecting strong operational execution."
Thanks to the Aetna acquisition, CVS' revenues in its health benefits business skyrocketed from $641 million in the third quarter of 2018 to $17.2 billion in Q3 2019.
Aetna reported 22.8 million members through the first three quarters of 2019, reflecting increases in government plan enrollment and declines in commercial plan enrollment.
As a result of the performance, CVS raised its guidance for the year, increasing projected earnings per share from $6.89 to $7 in earnings to $6.97 to $7.05.