CVS Health CEO Karen Lynch is stepping down and will be replaced by David Joyner, after its shares fall 19%.

CVS Health He said Friday CEO Karen Lynch resigned after the drugstore chain again warned that its profits would fall short of Wall Street expectations. Lynch will be replaced by CVS Caremark President David Joyner, who will try to guide the health care giant through a worsening environment of rising medical costs.

CVS, which cut its financial forecasts for the third time in August, said Friday that its third-quarter earnings will fall short of expectations.

Shares fell $6.27, or 9.9%, to $57.40 in premarket trading, a decline that comes after the stock has already fallen 19% this year.

Earlier this month, CVS said it was planning to do so 2,900 workers cut To cut costs as it struggles with discounts from consumers suffering from inflation, as shoppers cut back on spending on non-prescription items, as well as financial pressures on the pharmacy side of its business.

Joyner, who will also join the company’s board of directors, most recently served as executive vice president of CVS Health and president of CVS Caremark. He led the Pharmacy Services business, which provides solutions to employers, health plans and government agencies and serves approximately 90 million members through Caremark, CVS Specialty and other businesses. Joyner has 37 years of experience in healthcare and pharmacy benefits management.

CVS Health also announced Friday that Chairman Roger Farah will now serve as CEO.

“We believe David and his deep understanding of our integrated business can help us directly address the challenges our industry faces, more quickly advance the operational improvements our company requires, and realize the full value we are uniquely able to create,” Farah said in a statement. .

Deficit in profits

The Woonsocket, Rhode Island, company’s preliminary forecast is for third-quarter adjusted earnings of $1.05 to $1.10 per share, citing higher-than-expected medical cost trends. Analysts surveyed by FactSet expect earnings of $1.69 per share.

Back in August, CVS Health changed leadership of its health insurance business as it continued to grapple with spiraling costs. At that time, the company hired Lynch to lead its insurance business, replacing Executive Vice President Brian Kane, who left the company about a year after his arrival.

Rising claims from the company’s Medicare Advantage coverage have hurt CVS Health for much of this year and contributed to repeatedly downgrading its 2024 outlook. Medicare Advantage plans are privately run versions of the federal government’s coverage program primarily for people 65 and older.

CVS Health also said in August that it was hurt by lower quality ratings for those plans and pressure from Medicaid coverage it administers in several states.