CVS 2003 Annual Report Download - page 5

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(3)
OFFERING A UNIQUE We’ve distinguished ourselves in other ways as well. For example, CVS offers a unique front-end
focus on
FRONT-END EXPERIENCE cosmetics, health, and beauty. We carry France’s Avène®and Vichy®beauty care lines and are
currently
the exclusive U.S. distributor of Finland’s Lumene
®
brand.
It’s worth noting that 40 percent of our Lumene
customers are new to the skin care category at CVS, a clear indicator that such offerings help drive front-of-
store sales growth. In addition, customers value the way we tailor our stores with merchandise targeted to
ethnic preferences and the other needs of distinct neighborhoods. Our web site, CVS.com, offers the ability
to order unique products online.
With our PharmaCare®subsidiary, which celebrates its 10th anniversary in 2004, we’ve built one of the
most comprehensive U.S. pharmacy benefit management (PBM) and specialty pharmacy companies. The
fourth-largest PBM overall with 15 million members, PharmaCare is recognized as the leader in offering a full-
service solution for small and mid-sized clients. Its 17 percent jump in revenue in 2003 pushed PharmaCare’s
annual sales past $1.3 billion. I’m happy to note that PharmaCare also continues to benefit from enhanced
sales and marketing efforts
following the integration of ProCare, our specialty pharmacy division.
CVS also tries to make it easy for doctors to maximize their time spent with patients. We are a charter member
of SureScripts, an organization formed to provide an electronic link between doctors and pharmacies. This
should help make the prescription-filling process faster and more efficient, and a highly promising beta test
is currently underway in Rhode Island. We expect the necessary connections to be deployed nationwide by
year-end 2004, with acceptance by prescribers occurring over time.
EXPECTING MORE We are committed to steady, long-term, profitable growth. As we enter 2004, I have reason to feel very
GOOD NEWS IN 2004 optimistic about CVS’ prospects. For starters, we’ve built a top-notch management team that is focused on
AND BEYOND transforming a good retailer into a great one. Our team includes a number of individuals who have spent close
to two decades with CVS, as well as professionals who have joined us from other industries. The resulting
breadth of our executive talent has made us a stronger organization, ready to seize new opportunities.
Moreover, we have clarity of mission among the 110,000 associates who are putting our “CVS easy”
Financial Highlights
2003 2002
In millions, except per share (53 weeks) (52 weeks) % Change
Sales $ 26,588.0$24,181.5 10.0
Operating profit 1,423.6 1,206.2 18.0
Net earnings 847.3 716.6 18.2
Diluted earnings per common share 2.06 1.75 17.7
Stock price at year end 36.12 24.97 44.7
Market capitalization at year end 14,281 9,814 45.5