The move to $15 an hour next year will mark a more than 60% increase in the company's minimum hourly wage over a four-year period. The new wage structure will include additional increases that create higher starting hourly rates for roles such as pharmacy technicians and call center representatives. The health care giant notes that approximately 65% of its hourly employees are already making more than $15 an hour.
"Attracting and retaining top talent across our businesses is critical as we continue to redefine what it means to meet people’s health needs," CVS Health President and CEO Karen Lynch said in a statement. "These wage increases will have a meaningful impact on our colleagues and their families while helping the communities we serve prosper."
In addition to the wage boost, CVS has eliminated high school diploma or GED requirements for the majority of its entry-level roles, and will eliminate the GPA requirement for university recruitment.
The announcement comes after the company's revenue increased 11.1% in the second quarter to $72.6 billion, compared to $65.3 billion a year ago. CVS Health reported net income of $2.79 billion, or $2.10 diluted earnings per share, compared to $2.96 billion, or $2.26 diluted earnings per share, a year ago. On an adjusted basis, earnings per share for the second quarter was $2.42. Same store sales rose 23%, compared to 2.4% a year ago.
CVS Health's retail and long-term care segment posted revenue of $24.7 billion, up from $21.6 billion a year ago, a 14.2% year-over-year increase driven by a surge in prescription volume, COVID-19 vaccinations and diagnostic testing and higher front store revenues across all product categories. During the second quarter, CVS Health administered more than 6 million COVID-19 tests and nearly 17 million COVID-19 vaccines nationwide and filled 394.4 million prescriptions.
Meanwhile, its pharmacy services and health care benefits segments posted total revenues of $38.3 billion and $20.5 billion, respectively, up from $34.8 billion and $18.4 billion a year ago.
Looking ahead, CVS Health is raising its full year outlook for fiscal 2021, with diluted earnings per share now expected in the range of $6.35 to $6.45, up from $6.24 to $6.36, and adjust earnings per share in the range of $7.70 to $7.80, up from $7.56 to $7.68. Full year cash flow from operations is now expected to be between $12.5 billion to $13 billion, compared to previous guidance of $12 billion to $12.5 billion
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Shares of CVS have have tumbled during Wednesday's trading session following the wage and earnings announcements.