In a Wednesday interview with CNBC’s Jim Cramer, CVS CEO Karen Lynch said she is taking responsibility for the company’s Aetna insurance business after the most recent quarter missed expectations.
“Our problem … is the Aetna business. We’ve had some challenges, the industry has had some challenges, and I, as I said this morning, I wasn’t happy with the financial performance of that business,” Lynch said. “I’m taking direct ownership and am going to focus on the financial and operational execution of that business.”
CVS slashed its full-year guidance on Wednesday for the third consecutive quarter, and shares were down 3.2% by the close. Insurers have broadly seen costs increase as Medicare Advantage patients return to hospitals for procedures that had been postponed due to the pandemic. CVS also announced that Aetna president Brian Kane would leave his role, and Lynch would take over management of the business.
Lynch said it is necessary to “look at the totality of the business,” saying she was pleased with other segments like retail and pharmacy. She added the company has “really strong momentum going into 2025.”
She also discussed brick-and-mortar store challenges, saying theft is still an issue even though it has decreased somewhat. She also said CVS is piloting a new program at several stores in New York where customers can unlock products on shelves using QR codes. According to Lynch, the company is also on track to reach its three-year goal of closing 900 stores by the end of 2024.
“I know this business. I know it well. I know where the opportunities are. I know where the issues are and I am very focused on it right now,” Lynch said.
