CVS is now nearing a whopping 900 store closures as it sets to finish wrapping up its three-year plan – shuttering a total of 851 locations.
CVS Health is also shifting its leadership and cutting costs as sales suffer while hundreds of stores have shuttered nationwide.
This makes it the third time the healthcare company has slashed its 2024 forecast.
On August 7, 2024, CVS Health announced that its CEO, Karen Lynch, will be taking over leadership of the company’s insurance business segment.
She will be replacing Executive Vice President Brian Kane, who is departing the company.
Kane’s exit comes just around a year after he joined CVS Health, indicating a relatively short tenure in his role.
The report states that the company has faced challenges due to an increase in claims from its Medicare Advantage coverage, which has contributed to CVS Health repeatedly lowering its financial outlook for 2024.
Medicare Advantage plans are private insurance plans that provide an alternative to the federal government’s traditional Medicare program, primarily serving people aged 65 and older.
The healthcare company also said it has been damaged by a decrease in quality ratings for those plans and pressure from Medicaid coverage it manages in multiple US states, per The Associated Press.
CVS Health’s adjusted operating income from its health benefits business dropped 39% in the quarter to $938 million, which helped to plummet overall profit.
Adjusted operating income, which does not include factors like capital gains, also faced a 12% reduction for the company’s pharmacy business, which operates thousands of drugstores nationwide.
CVS Health filled more prescriptions in the second quarter of the year, but it has had to manage tighter reimbursement for those drugs, per the outlet.
Excluding the pharmacy, the company also said that store sales decreased partially due to customers purchasing fewer COVID-19 test kits.
CVS Health is planning a multiyear, $2 billion cost-cutting program, Lynch said, according to The Associated Press.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
A beloved grocery chain now confirms unexpected closures across the Northeast taking place by the end of the year.
Grocery chain Stop & Shop has announced that a total of 32 underperforming locations will shutter in the U.S.
The company said the select stores across the Northeast will be closed before the end of the year.
Stores in New Jersey, Massachusetts, New York, Connecticut, and Rhode Island will close by November 2.
In May, the company announced the coming store closures.
“Stop & Shop has evaluated its overall store portfolio and made the difficult decision to close underperforming stores to create a healthy base for the future growth of our brand,” company president Gordon Reid said, per a July 12 press release.
The company’s president added that the closures were essential “to create a healthy base for the future growth of our brand.”
Fortunately, employees will be offered other positions within the company, according to a press release.
The grocery outlet first opened in 2014 and currently has around 400 stores and 60,000 employees, per Fox affiliate KRLD.
Stop & Shop is owned by Ahold Delhaize which also owns Food Lion, Giant Food, and Hannaford.
Which grocery stores are closing?
In New Jersey, 10 locations will close, while only seven will close in New York.
Rhode Island will see two closures and Massachusetts, the home of the first location, will be closing eight.
Five stores will also be closing in Connecticut.
As other chains such as Walmart and Amazon join the grocery business, it has pushed traditional grocery stores out of view, reports The-Sun.
Stop & Shop hopes the closure of underperforming stores will create “future growth” for the company.
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