Chemed Corporation saw its stock plunge 8.8% to $430.20 on July 29 following disappointing second-quarter results that substantially missed analyst expectations. The company reported earnings per share of $4.27, falling 20.8% short of the $5.39 forecast, while revenue reached only $618.8 million against anticipated $650.6 million. In response to these challenges, Chemed dramatically cut its 2025 full-year guidance from $24.95-$25.45 per share to just $22.00-$22.30, representing a nearly 10% reduction that further rattled investors. The timing proved particularly unfortunate as the company’s hospice division, VITAS Healthcare, announced a leadership transition with CEO Nicholas Westfall stepping down after nine years, to be replaced by Joel Wherley, the current President and COO. VITAS faces significant Medicare billing issues in Florida, with potential charges of $19 million for fiscal 2025.
Dual Business Struggles
Chemed’s plumbing division, Roto Rooter, also showed concerning weakness with adjusted EBITDA dropping 18.7% to $48.6 million and profit margins contracting by over 5 percentage points to 21.8%. CEO Kevin McNamara attributed the decline to multiple factors, including higher insurance costs and changes to Google search algorithms reducing free leads. The division now projects anemic growth of just 1.25% to 1.75% for the year. Despite these headwinds across both business segments, management expressed confidence that both divisions would eventually return to stable growth trajectories.
