Just something I realized and wanted to know if anyone else here could shed some light on this. So many already know about the supposed "corporate accounting snafu" and managers were told to cut 5% off the top of this years raise budgets. It just dawned on me, that this ask from corporate, basically comes right after they had to lower their full year profit estimates, from 8.70-8.90 per share, down to 8.50-8.70 per share.
Now this lowering of profit estimates was due to unexpectedly closing on both companies CVS bought this year. Oak st. health deal wasn't supposed to be completed until next year. So now right after that announcement of lowering full year guidance, the stock drops cause Wall st. isn't happy due to the uncertainty all this extra added expense (debt) creates. So now corporate realizes they accidentally spent too much money this year and now they need to cut costs anywhere they can to soften the blow for Wall st.
So, obviously hours cuts are #1 thing CVS does to cut expenses. But, right after they cut full year guidance, they say "oops there was an accounting error and we accidentally gave you guys too much raise budget, and now we need you to cut 5% off the top for us"??
I don't think there was any accounting error at all. I think CVS just spent too much money on these 2 companies and now they want the little guy at the bottom to pay for THEIR overspends. It also explains why DL's were hounding managers to get reviews done ASAP, and why once they were done DL's said we'll take it from here and don't change anything at all once we have it in our hands. My guess is DL's are gonna hack your raises to pieces.
Thoughts?