CVS 1998 Annual Report Download - page 6

1999 and beyond.
CVS’ strong financial performance has
translated into excellent returns for our share-
holders. CVS delivered a 73% total return to
shareholders in 1998. That compares to an
increase of 18% for the Dow Jones Industrial
Average and 29% for the S&P 500 for the year.
Our market capitalization grew dramatically,
from $11 billion at year-end 1997 to more than
$21 billion at year-end 1998. Reflecting the sig-
nificant increases in CVS’ stock price, our Board
of Directors approved, on May 13, 1998, a 2-for-
1 stock split, effective June 15, 1998. Also at that
time, the Board approved an increase in CVS’
annual cash dividend to $0.23 per share (on a
post-split basis), underscoring the Board’s opti-
mism for CVS’ continued growth prospects.
Accelerated Real Estate
Development Program Is Expected
to Provide Significant Growth
In October 1998, based on our strong real
estate pipeline and solid financial position, we
decided to ramp up our new store program.
Under our accelerated plan, we opened a record
382 new or relocated stores in 1998. Our plans
call for the opening of 440 new or relocated
stores in 1999. We anticipate that most of these
will be in existing markets. We already operate in
many fast-growing markets and enjoy the #1
position in six of the top ten drugstore markets in
the U.S. We also plan to announce our entry into
two new markets in 1999 and to add at least one
new market each year thereafter.
Successfully Tackled the Formidable
Challenge of the Revco Integration:
Excellent Opportunity Lies Ahead
The acquisition of Revco in May 1997 was a
milestone event for our company, doubling our
revenues and nearly tripling our store base. Since
that time, we have been working diligently to
integrate the two companies smoothly and take
advantage of the enormous potential of our com-
bined organization—all while maintaining our
standards of excellence in serving customers.
We gave change a good name by converting
all Revco stores to CVS stores. We completed all
systems conversions; remerchandised all Revco
stores to be compatible with CVS; and remod-
eled approximately 1,900 Revco stores to “look
and feel” like CVS—all within a 16-month peri-
od. We are extremely proud of these tremendous
accomplishments. More importantly, customers
are responding to what CVS has to offer. Revco’s
solid pharmacy franchise continues to show
Care about
4
CVS pharmacists pride themselves on their relationships
with customers. Our knowledgeable pharmacists provide
counseling and healthcare information to millions of
customers every week.