Sales at CVS were once again burned by its decision not to sell cigarettes.
CVS Caremark reported that its general merchandise sales fell in the most recent quarter mainly as a result of its decision to pull cigarettes and other tobacco products from its shelves. due to their negative impact on health.
This was the fifth straight quarter that CVS took a hit to merchandise sales.
Still, total sales improved, climbing 10%, or $3.6 billion, thanks to a jump in spending on prescription drugs. But those drug sales face their own headwinds as several generic brands have hit the market in the last year.
In February 2014 the company announced plans to stop selling tobacco products, although it acknowledged at that time it would cost it sales. The ban took effect in early September last year, which means the year-ago period was only partly impacted by the loss of tobacco sales.
Despite the drop in general merchandise sales the company posted improved earnings, topping Wall Street expectations. But shares of CVS were down in 5% in early trading.
