Tobacco is big business in America, which means if you’re probably making a decent profit by selling it at your stores.
In its announcement, management warned that it will lose around $US2 billion in annual revenues from this decision. That breaks down to around $US1.5 billion in tobacco sales and $US500 million in sales of other products to tobacco customers. This represents around 17 cents per share. To the bottom line, it represent $US0.06 to $US0.09 in earnings per share.
In fiscal 2012, CVS had $US123 billion in net sales and earned $US3.03 per share from continuing operations.
Shares are down by around 1.6% in premarket trading.
Management says the sales ban will go into effect October 1.