CVS Health To Shut Down 900 Stores Over Next 3 Yrs

(RTTNews) - CVS Health Corp. (CVS) announced on Thursday that it would be shutting down around 900 stores over the coming 3 years as the company adjusts to the growing trend of online shopping.

In a statement, the company said that going forward it, it would invest more in online sales and all its stores would soon be re-modelled into healthcare destinations, which would offer numerous health-care services like flu shots and diagnostic tests.

CVS said that it will incur an impairment charge of around $1 billion - $1.2 billion, or $0.56 - $0.67 per share in the fourth quarter, as a result of the proposed store closures. The impairment charges include the cost of operating leases, property and equipment.

Following this, the company expects fiscal 2021 earnings in the range $5.46 - $5.67 per share. Earlier, CVS Health had forecast earnings of between $6.13 and $6.23. The adjusted earnings guidance remains the same as impairment charges will not be included in these results.

The company will begin closing its stores in Spring 2022 and around 300 stores will be shut down every year. The closure will sum up to around 9 percent of CVS Health's nearly 10,000 U.S stores.

CVS did not disclose how many employees would lose their job because of the closures and the company said that it would ensure that those people who lost their jobs will soon become independent.

The company is revamping its business as the COVID-19 pandemic brings about many changes in customer behavior. More and more people are getting prescriptions filled online, getting personal care items through curb side pickup and visiting doctors online.

With more businesses becoming online, CVS said it plans to use three different store formats for its existing stores. One group will offer primary care services while the other will become HealthHubs. The third group will remain traditional stores, which fill prescriptions and sell items from shampoo to milk.