CVS 2004 Annual Report Download - page 15

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Investors have responded enthusiastically to our ongoing success and to our
prospects following the acquisition. CVS stock produced a 25.5 percent total
return to shareholders in 2004. That number far exceeded the returns of the
S&P 500 Index, the S&P Retail Index, and the chain drug industry.Our balance
sheet remains among the strongest in the industry,as evidenced by our A–
debt rating from Standard & Poor’sand our A3 rating from Moody’s Investor
Services. Our continued financial strength allowed us to announce a 9 percent
dividend increase in the first quarter of 2005.
Same-store sales grew 5.5 percent, excluding the acquired stores, with pharmacy
same-store sales up 7.0 percent. Our pharmacy business continues to gain share
and now has 13.5 percent of the U.S. retail pharmacy market. Meanwhile, front-
end same-store sales climbed 2.3 percent. We gained significant retail share in all
our key front-end categories, especially photo, cosmetics, skin care, candy, and
healthcare. With CVS proprietary products such as Nuprin healthcare products,
the first disposable digital camera with color preview, and other new CVS private
label and exclusive brands, we continued to differentiate our offerings.
Rapidly integrating our new businesses; expanding in high-growth markets
I’m happy to report that the Eckerd integration is proceeding faster than any
large-scale integration in our industry’s history. Thanks to the talents of our
management team, their experience with prior acquisitions, and our state-of-the-
art technology,we’ve already put the greatest risks associated with the integra-
tion behind us. We completed the migration of all financial and store systems
by Thanksgiving, less than four months after closing the deal and ahead of our
end-of-year target.
13
Chairman, President, and CEO Tom Ryan