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A general view shows a sign of CVS Health Customer Support Center in CVS headquarters of CVS Health Corp in Woonsocket, Rhode Island, U.S. October 30, 2023.
Faith Ninivaggi | Reuters
Longtime CVS Health executive David Joyner has replaced Karen Lynch as CEO, as the company struggles to drive higher profits and stock performance, CVS announced Friday.
The move, effective Thursday, the day before the announcement, comes as CVS shares have fallen nearly 20% this year. Shares plunged about 11% in premarket trading Friday.
CVS has faced challenges as higher medical costs weigh on its insurance unit, Aetna, and consumer spending drops at its retail pharmacies. In August, the company slashed its full-year profit guidance and said it would cut $2 billion in costs over the next several years.
In its release Friday, CVS also said it expects adjusted earnings of between $1.05 and $1.10 per share in its third quarter. It anticipates higher medical costs than previously expected, with a so-called medical benefit ratio of 95.2% in the quarter.
"In light of continued elevated medical cost pressures in the Health Care Benefits segment, investors should no longer rely on the Company's previous guidance provided on its second quarter 2024 earnings call on August 7, 2024," CVS said in the release.
Joyner most recently oversaw the company's pharmacy services business as president of CVS Caremark, a similar position to the one Lynch held before she assumed the top job in February 2021.
Lynch also stepped down from the company's board of directors this week, the company said Friday. Joyner will take a seat on the board, and Chairman Roger Farah will assume the role of executive chairman.
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