Retail sales in the United States increased 0.5% sequentially in July 2025, in line with market expectations and following an upwardly revised 0.9% rise in June. The largest increases were seen in sales at motor vehicle & parts dealers (1.6%), and furniture & home furn. stores (1.4%). Other gains were seen in sales at sporting goods, hobby, musical instrument, & book store (0.8%), nonstore retailers (0.8%), clothing & clothing accessories stores (0.7%) and gasoline stations (0.7%). Winning Areas Below, we h ...

Core Viewpoint - CVS Health reported stronger-than-expected second-quarter earnings and revenue, leading to an increase in its adjusted profit outlook, driven by the retail pharmacy business and improvements in its insurance unit [1][2]. Financial Performance - The company expects fiscal 2025 adjusted earnings to be between $6.30 and $6.40 per share, an increase from the previous guidance of $6 to $6.20 per share [2]. - CVS reported net income of $1.02 billion, or 80 cents per share, for the first quarter, down from $1.77 billion, or $1.41 per share, in the same period last year [5]. - Adjusted earnings for the quarter were $1.81 per share, exceeding the expected $1.46 per share [8]. - Revenue for the first quarter was $98.92 billion, an 8.4% increase from the previous year, surpassing the expected $94.50 billion [6][8]. Business Segments - The retail pharmacy business is performing well, attributed to new technology and investments in labor, which have improved operations and efficiency [4]. - The insurance unit, Aetna, is undergoing a multi-year recovery effort to address higher medical costs, contributing to the positive outlook [3]. - However, the strength in the retail pharmacy and insurance segments was partially offset by a decline in the health services segment [4]. Strategic Initiatives - CVS is pursuing a broader turnaround plan that includes $2 billion in cost cuts over the next several years, with plans to close additional locations while expanding in underrepresented areas like the Pacific Northwest [7].

Group 1 - Walgreens has been struggling with weak business performance, compounded by unsuccessful investments in pharmacy benefit management and medical clinics, leading to a need for major overhaul [2][4][5] - The company is being taken private by Sycamore Partners, with the deal expected to close in the second half of 2025, offering shareholders $11.45 per share in cash [6][8] - Walgreens is looking to sell its medical clinic business post-privatization, with potential proceeds worth up to $3 per share for shareholders, representing a possible 25% upside [9][10] Group 2 - The transition to private ownership may allow for bolder management decisions without the pressure of public market expectations, but the guaranteed return for current investors is limited [6][8] - The uncertainty surrounding the sale of the clinic business and its timing makes it a special situation that may only attract more aggressive investors [10][11] - The public company's story is nearing its end, with potential future re-entry into public markets contingent on successful business revamps [11]

Core Insights - Albertsons Companies, Inc. (ACI) reported first-quarter fiscal 2025 results with sales and earnings exceeding the Zacks Consensus Estimate, although the bottom line declined year-over-year [1][3] Financial Performance - Adjusted quarterly earnings were 55 cents per share, surpassing the Zacks Consensus Estimate of 53 cents, but down 16.7% from 66 cents in the prior year [3][10] - Net sales and other revenues reached $24,880.8 million, exceeding the Zacks Consensus Estimate of $24,719 million, and rose 2.5% year-over-year, driven by a 2.8% increase in identical sales and a 20% increase in pharmacy sales [3][10] - Digital sales grew by 25%, primarily due to strong first-party sales, although these gains were partially offset by a decline in fuel sales [3][10] Customer Engagement and Growth Initiatives - Identical sales growth was supported by advancements in pharmacy, digital platforms, and loyalty programs, with loyalty membership increasing by 14% to 47.3 million [2][4] - The company is focused on enhancing customer value, modernizing operations through technology, and investing in store upgrades and efficiency for long-term growth [2] Margins and Expenses - Gross profit remained flat at $6.74 billion, but gross margin contracted by 70 basis points to 27.1% compared to the previous year [5][10] - Selling and administrative expenses increased by 0.7% to $6.32 billion, with a decline of 50 basis points as a percentage of net sales [7] - Adjusted EBITDA declined 6.2% year-over-year to $1.11 billion, with an adjusted EBITDA margin of 4.5%, down 40 basis points [8] Capital Expenditures and Shareholder Returns - Capital expenditures totaled $584.6 million, reflecting the completion of 36 remodels and the opening of three new stores, with a forecast of $1.7-$1.9 billion for fiscal 2025 [12] - The company paid a quarterly dividend of 15 cents per share and repurchased 14.2 million shares for $314.8 million under a $2 billion repurchase authorization [13] Fiscal 2025 Outlook - Albertsons updated its fiscal 2025 outlook, expecting identical sales growth of 2.0-2.75% and adjusted EBITDA between $3.8 billion and $3.9 billion [15] - Adjusted earnings per share are projected to be in the range of $2.03-$2.16, down from $2.34 in fiscal 2024 [16]

Core Insights - Walgreens Boots Alliance reported a quarterly loss that was better than expected, with rising pharmacy sales indicating potential for financial recovery under new private equity ownership [2] - The acquisition by Sycamore Partners, valued at $10 billion, is anticipated to lead to significant cost-cutting measures [3] - Shareholder approval for the acquisition is scheduled for a special meeting on July 11, with no serious opposition reported [4] Financial Performance - In the fiscal third quarter, Walgreens reported a net loss of $175 million, or 20 cents per share, compared to a net income of $344 million, or 40 cents per share, in the same period last year [5] - Total sales increased by 7% to $39 billion in the third quarter [5] - The U.S. Healthcare segment generated $2.1 billion in sales, with an operating loss of $64 million, significantly improved from a $220 million loss in the previous year [6] Cash Flow and Cost Management - Analysts noted Walgreens' ability to generate positive free cash flow in the quarter, a significant improvement given recent negative trends [7] - The company is on track to meet its goal of closing 1,200 underperforming stores by fiscal 2027, having already closed over 400 stores in the first nine months of the fiscal year [8] Strategic Outlook - The transition to private ownership is viewed positively, allowing Walgreens to focus on long-term reinvention without the pressures of public market expectations [10] - The company aims to close 500 stores in the current fiscal year as part of its cost-saving initiatives [8]

Core Insights - Cigna reported $65.45 billion in revenue for Q1 2025, a 14.3% year-over-year increase, with an EPS of $6.74 compared to $6.47 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue of $65.45 billion surpassed the Zacks Consensus Estimate of $60.8 billion, resulting in a surprise of +7.66% [1] - EPS of $6.74 exceeded the consensus estimate of $6.39, delivering a surprise of +5.48% [1] Key Metrics - Medical Care Ratio was reported at 82.2%, slightly better than the estimated 82.4% [4] - Total Medical Customers were 18.04 million, below the estimated 18.33 million [4] - U.S. Healthcare Insured Medical Customers were 2.65 million, significantly lower than the estimated 3.23 million [4] - International Health Insured Medical Customers were reported at 1.23 million, matching the average estimate [4] Revenue Breakdown - Pharmacy revenues reached $48.63 billion, exceeding the average estimate of $45.58 billion, marking a +15.7% year-over-year change [4] - Net investment income was $238 million, below the average estimate of $255.45 million, reflecting a -17.9% year-over-year decline [4] - Evernorth Health Services generated $53.68 billion, surpassing the estimated $50.54 billion, with a +16.1% year-over-year increase [4] - Cigna Healthcare revenues were $14.53 billion, exceeding the average estimate of $12.16 billion, representing a +9.4% year-over-year change [4] - Premiums from Cigna Healthcare totaled $12.63 billion, above the estimated $11.02 billion, showing a +9.5% year-over-year increase [4] - Evernorth Health Services Pharmacy revenues were $50.23 billion, exceeding the average estimate of $47.34 billion, with a +16.3% year-over-year change [4] - Fees and Other revenues were reported at $3.90 billion, slightly above the estimated $3.84 billion, reflecting a +17.1% year-over-year increase [4] - Total Premiums reached $12.74 billion, surpassing the estimated $10.60 billion, indicating a +9.8% year-over-year increase [4]

Core Viewpoint - The Cigna Group is expected to report first-quarter 2025 results on May 2, 2025, with earnings estimated at $6.39 per share and revenues of $60.8 billion, indicating a year-over-year revenue growth of 6.2% despite a slight decline in earnings [1][2]. Financial Performance - The first-quarter earnings estimate has decreased by 2 cents over the past 60 days, reflecting a year-over-year decline of 1.2% [1]. - For the full year 2025, the revenue estimate is $252.36 billion, representing a 2.1% increase year over year, while the EPS estimate is $29.61, indicating an 8.3% growth [2]. Earnings Prediction - The current model does not predict a definitive earnings beat for Cigna, with an Earnings ESP of -0.34% and a Zacks Rank of 3 (Hold) [3]. Revenue Drivers - Cigna's revenues are anticipated to benefit from strong pharmacy revenues, particularly from the specialty pharmacy business within the Evernorth segment, with an expected 8.4% improvement in pharmacy revenues year over year [5]. - The Evernorth Health Services segment is projected to generate revenues of $50.5 billion, indicating a 9.3% growth from the prior year [6]. Challenges - The consensus estimate for premiums indicates an 8.6% decrease year over year, and Cigna Healthcare revenues are expected to decline by 8.5% [7]. - The total medical customers are projected to decrease to 18.3 million from 19.2 million a year ago [7]. - A decline in net investment income is expected, with an 11.9% year-over-year decrease anticipated [7]. - Elevated medical costs due to higher utilization trends and unit cost inflation are likely to impact margins, with the medical care ratio (MCR) expected to rise to 82.39% from 79.9% a year ago [8].

Core Viewpoint - Analysts forecast that Cigna (CI) will report quarterly earnings of $6.39 per share, reflecting a year-over-year decline of 1.2%, with revenues expected to reach $60.8 billion, an increase of 6.2% compared to the previous year [1] Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted upward by 0.5%, indicating a reassessment of initial projections by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong relationship between earnings estimate revisions and short-term stock price performance [3] Revenue Forecasts - Analysts estimate 'Revenues- Net investment income' at $255.45 million, down 11.9% year-over-year [5] - 'Revenues- Premiums' are projected to be $10.60 billion, reflecting an 8.6% decline from the prior year [5] - 'Revenues- Evernorth Health Services' are expected to reach $50.54 billion, showing a 9.3% increase year-over-year [5] - 'Revenues- Pharmacy' are forecasted at $45.58 billion, indicating an 8.4% increase from the previous year [6] - 'Revenues- Cigna Healthcare' are expected to be $12.16 billion, down 8.5% year-over-year [6] - 'Revenues- Fees and Other' are projected to reach $3.84 billion, reflecting a 15.6% increase year-over-year [6] - 'Revenues- Evernorth Health Services- Pharmacy' are estimated at $47.34 billion, indicating a 9.7% increase year-over-year [7] Medical Care and Customer Metrics - The 'Medical Care Ratio - Cigna Healthcare' is expected to be 82.4%, up from 79.9% in the same quarter last year [7] - 'Medical Customers - Total' is estimated at 18.33 million, down from 19.18 million in the previous year [8] - 'Medical Customers - International Health administrative services' are projected at 441.84 thousand, compared to 433 thousand last year [8] - 'Covered Lives By Funding Type - Medical Customers - International Health insured' is expected to be 1.23 million, up from 1.19 million year-over-year [9] - The estimate for 'Medical Customers - U.S. Healthcare administrative services' stands at 13.67 million, slightly up from 13.62 million last year [9] Stock Performance - Over the past month, Cigna shares have returned +1.8%, while the Zacks S&P 500 composite has returned -0.8% [9]