CVS To Shareholders: Drop Dead
I understand the argument for why CVS should stop carrying cigarettes. Cigarettes are bad for you. Drug stores insist they are part of the healthcare industry. Got it.
Now, if I was a shareholder in CVS, I still might be pretty pissed:
CVS Caremark Corp., which has 7,600 stores nationwide, said it will lose about $2 billion in annual revenue by phasing out tobacco, but the move will not affect its 2014 earnings forecast. CVS notches about $1.5 billion annually in tobacco sales, but it expects a bigger hit because smokers often buy other products when they visit their stores. The company brought in more than $123 billion in total revenue in 2012.
The company declined to say what will take tobacco’s prominent shelf place behind cash registers at the front of its stores. CVS will test some items and may expand smoking cessation products that are sometimes sold near cigarettes.