MELVILLE, N.Y.--(BUSINESS WIRE)--Henry Schein, Inc. (Nasdaq: HSIC), the world's largest provider of healthcare solutions to office-based dental and medical practitioners, has been recognized as one of the 2026 World's Most Ethical Companies® by Ethisphere, a global leader in defining and advancing the standards of ethical business practices. "To be honored for our ethical practices reflects the values that have guided Henry Schein for decades,†said Fred M. Lowery, Chief Executive Officer of He. ...

Core Viewpoint - The article reflects on the performance and outlook of Henry Schein, Inc. (HSIC) after almost five years since the last analysis, maintaining a positive stance on the stock as a "Buy" due to its competitive advantages and defensibility in the market [1]. Group 1: Company Analysis - The analysis emphasizes the importance of high-quality companies that can outperform the market over the long term, highlighting Henry Schein's competitive advantage or economic moat [1]. - The focus is on companies in the European and North American markets, without restrictions on market capitalization, indicating a broad investment approach [1]. Group 2: Analyst Background - The analyst has a Master's Degree in Sociology with a focus on organizational and economic sociology, and a Bachelor's Degree in Sociology and History, suggesting a strong academic foundation for the analysis [1].

Core Insights - The presentation focuses on the recent earnings results of Henry Schein and provides guidance for 2026, highlighting significant transitions within the company [1][3]. Group 1: Earnings Highlights - Henry Schein reported positive results for the fourth quarter, indicating overall satisfaction with the performance [4]. - The dental distribution segment showed improving growth both in the U.S. and internationally, suggesting an increase in market share [4]. - There was a notable recovery in distribution growth after experiencing negative growth in the second quarter, attributed to successful promotional programs [4].

Summary of Henry Schein FY Conference Call (March 10, 2026) Company Overview - **Company**: Henry Schein (NasdaqGS:HSIC) - **Industry**: Dental distribution and healthcare products Key Highlights from Q4 2025 - **Dental Business Growth**: Notable improvement in dental distribution growth in both the U.S. and international markets, indicating market share gains [4][5] - **Equipment Sales**: U.S. dental equipment sales exceeded 10% growth in Q4, significantly outpacing market trends, reflecting customer confidence in practice investments [5][6] - **Market Share**: Successful promotional programs contributed to growth, with a focus on new customer acquisition [5][14] Financial Guidance for 2026 - **Earnings Per Share (EPS)**: Guidance set at $5.23-$5.37, representing a 5%-8% growth [8] - **Cost Management**: Anticipated costs related to value creation initiatives in the first half of the year, with earnings growth expected to be more pronounced in the second half [9] Segment Performance - **Dental Specialty**: Strong growth in dental implants, particularly in Europe, with steady growth in the U.S. driven by a new value implant [7][41] - **Technology**: Henry Schein One holds approximately 50% market share in dental practice management systems, with new product launches aimed at improving operational efficiency for customers [7][8] - **Merchandise Growth**: Achieved 3%-4% growth in merchandise, attributed to promotional activities and recruitment of experienced sales representatives [36] Innovation and Market Trends - **Digital Transition**: Many dental practices have yet to fully embrace digital technologies, indicating a long runway for growth in digital equipment sales [22][29] - **Intraoral Scanners**: Price reductions in scanners are attracting more practices, facilitating further sales of digital equipment [29][31] Leadership Changes and Strategic Direction - **New CEO**: Fred Lowery appointed as CEO, succeeding Stanley Bergman, with a focus on fresh perspectives and strategic execution [53][56] - **KKR Investment**: KKR now holds a 19.9% stake in the company, providing new board members and a collaborative culture that supports value creation initiatives [57][60] Capital Deployment Strategy - **Share Buybacks**: $850 million in stock repurchases executed, indicating belief in the stock's undervaluation [66] - **M&A Activity**: Slower pace of acquisitions noted, with a focus on share repurchases as a priority for capital deployment [68] Market Outlook - **Positive Market Sentiment**: Signs of optimism in the dental market, with peers showing recovery from previous challenges [71] - **Customer Confidence**: Equipment sales results suggest a confident customer base willing to invest in their practices, positioning Henry Schein favorably for future growth [72]

Core Insights - Henry Schein One has launched the next era of Dentrix Ascend, introducing three new packages aimed at enhancing revenue and growth for dental practices and Dental Service Organizations (DSOs) [1] - The new offerings are built on an integrated platform that combines practice management, clinical workflows, imaging, and revenue cycle management, reflecting a shift from legacy systems to modern cloud platforms [1] Product Innovations - The new packages include advanced features such as Voice Notes, Image Verify, Eligibility Pro, and Digital Forms, which leverage AI to streamline operations and reduce administrative burdens [1] - Voice Notes uses generative AI to convert conversations into structured clinical records, while Image Verify assesses clinical images at capture to prevent claim denials [1] - Eligibility Pro performs real-time benefits checks, completing 191 million checks in 2025, and Digital Forms captures insurance data from images, with 22 million forms completed in 2025 [1] Package Offerings - Dentrix Ascend now offers three structured packages: Ascend Accelerate, Ascend Pro, and Ascend Essentials, each designed to cater to different organizational needs and scalability [1] - Ascend Accelerate is tailored for multi-location organizations, while Ascend Pro is for established practices seeking automation, and Ascend Essentials is aimed at new or smaller practices [1] Support and Implementation - The new era of Dentrix Ascend includes AI-powered support through Claire, providing 24/7 assistance and facilitating smooth migration for practices and DSOs [1] - This support aims to help organizations realize value quickly and manage complexity as they scale [1] Market Position - Dentrix and Dentrix Ascend currently serve over 48,000 practices in the U.S. and 90% of the top 50 DSOs, processing approximately 100 million claims annually [1] - The advancements in Dentrix Ascend strengthen its position as a leading platform for modern dental organizations [1]

Group 1 - The company has appointed Fred Lowery as its new CEO, marking the first leadership change since the first Bush administration, and he is the fourth CEO in the company's 94-year history [1] - The transition in leadership reflects the company's strong culture and values, indicating a stable environment for future growth [1]

Summary of Henry Schein Conference Call Company Overview - **Company**: Henry Schein - **Industry**: Healthcare distribution, specifically dental and medical supplies Key Points and Arguments Leadership Transition - Henry Schein has appointed Fred Lowery as the new CEO, marking the first leadership change since the first Bush administration, with Lowery being the fourth CEO in 94 years [2][3] - Lowery brings operational excellence and a fresh perspective, previously having a successful tenure at Thermo Fisher [3][4] Market Trends - The dental market shows signs of stabilization and potential improvement, with core dental market growth previously estimated at 2%-4% [6][7] - Henry Schein's sales growth in the fourth quarter exceeded market growth, attributed to aggressive customer relationship strategies and promotional partnerships [7][8] Equipment Sales - The equipment segment saw significant growth, driven by partnerships with manufacturers and exclusive promotions [8][12] - Growth in equipment sales is viewed as a bellwether for practitioners' confidence in investing in their practices, indicating potential expansion in dental services [12][13] Macro Economic Factors - Interest rates have some influence on equipment sales, but the correlation is not strong; access to care and unemployment rates are more critical indicators for market performance [15][16] - The company focuses on helping practices improve efficiency and patient throughput rather than solely discussing macroeconomic indicators with clients [16] Role of Dental Service Organizations (DSOs) - DSOs are crucial for both merchandise and equipment sales, with 25 of the 27 largest DSOs in the U.S. considering Henry Schein their primary distributor [19] - The growth of DSOs is outpacing the rest of the market, providing Henry Schein with opportunities to capture market share [19] Specialty Segment Growth - Henry Schein is positioned as a leading player in the implant and endodontic markets, with steady growth in these segments [28][30] - The company aims to expand its market share in implants, particularly through value implants that appeal to general practitioners [29][35] Technology and AI Integration - Henry Schein One is leveraging AI through a partnership with AWS to enhance its digital imaging and practice management solutions [37][38] - New products like Voice Notes and Image Verify aim to reduce administrative burdens and improve operational efficiency for practitioners [38][39] Value Creation Plan - The company is focused on a value creation plan expected to deliver $125 million in operating income improvement by the end of 2026 [47][48] - This plan emphasizes structural changes and resource optimization across the organization, differing from past grassroots restructuring efforts [52] Medical Business Expansion - Henry Schein is expanding its medical business, particularly in home healthcare, which is growing faster and more profitably than its core medical business [56] - The company is focusing on consumable merchandise rather than durable medical equipment (DME) for its Home Solutions business [58] Additional Important Insights - The company is committed to maintaining strategic relationships with DSOs to avoid transactional dynamics and focus on driving profitability for practices [23][24] - The specialty segment, particularly implants, is seen as a significant growth area, with a goal of increasing the contribution of high-margin products to over 50% of operating income by 2027 [34][35]

Core Insights - Henry Schein, Inc. will participate in two investor conferences in March 2026, specifically the Barclays 28th Annual Global Healthcare Conference and Leerink's Global Healthcare Conference [1] Company Overview - Henry Schein, Inc. is the largest provider of healthcare solutions to office-based dental and medical practitioners, with over 25,000 employees globally [1] - The company serves more than 1 million customers worldwide, offering over 300 solutions aimed at improving operational success and clinical outcomes [1] - Henry Schein operates a centralized and automated distribution network, providing access to more than 300,000 branded and corporate brand products [1] - The company reported sales of $13.2 billion in 2025, with a compound annual growth rate of approximately 11% since going public in 1995 [1]

Core Insights - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market over the next 30 days, using an alphabetic rating system from A to F based on value, growth, and momentum qualities [2][10]. Value Score - The Value Style Score focuses on identifying stocks that are undervalued relative to their true worth, utilizing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow to highlight attractive investment opportunities [3]. Growth Score - The Growth Style Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable long-term growth [4]. Momentum Score - The Momentum Style Score assists investors in capitalizing on price trends, using metrics like one-week price changes and monthly earnings estimate changes to determine optimal entry points for stocks [5]. VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores into a single metric, helping investors find stocks with the best overall characteristics for value, growth forecasts, and momentum [6]. Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.86% since 1988, significantly outperforming the S&P 500 [7][8]. Stock Selection Strategy - To maximize returns, investors should target stocks with a Zacks Rank of 1 or 2 that also possess Style Scores of A or B, while stocks with a 3 (Hold) rank should also have high Style Scores to ensure potential upside [10][11]. Company Spotlight: Henry Schein Inc. - Henry Schein Inc., based in Melville, NY, is a leading distributor of healthcare products and services, operating in 33 countries and serving various healthcare practitioners and institutions [12]. - Currently rated 3 (Hold) by Zacks, Henry Schein has a VGM Score of A and a Growth Style Score of A, with a projected year-over-year earnings growth of 6.6% for the current fiscal year [12][13]. - Recent upward revisions in earnings estimates by analysts indicate a positive outlook, with the Zacks Consensus Estimate increasing by $0.03 to $5.30 per share, and an average earnings surprise of +2.1% [13].

Business Segments - The company operates through three reportable segments: Global Distribution and Value-Added Services, Global Specialty Products, and Global Technology[18]. - The Global Distribution and Value-Added Services segment includes distribution to the global dental and medical markets, offering over 300,000 products and shipping approximately 150,000 cartons daily[37]. - The Global Specialty Products segment focuses on dental implants, biomaterials, orthodontics, and endodontics, with a presence in approximately 90 countries[38]. - The Global Technology segment contributed 5.1% to total sales in 2025, up from 4.9% in 2023[40]. Financial Performance - Net sales for the year ended December 27, 2025, increased to $13,184 million, up from $12,673 million in 2024, representing a growth of 4.0%[373]. - Gross profit for 2025 was $4,105 million, compared to $4,016 million in 2024, reflecting a gross margin of approximately 31.1%[373]. - Operating income rose to $653 million in 2025, an increase from $621 million in 2024, indicating a growth of 5.1%[373]. - Net income attributable to Henry Schein, Inc. for 2025 was $398 million, up from $390 million in 2024, marking a 2.1% increase[373]. - Total assets as of December 27, 2025, were $11,215 million, compared to $10,218 million in 2024, reflecting a growth of 9.8%[370]. - Total liabilities increased to $6,421 million in 2025 from $5,381 million in 2024, representing a rise of 19.4%[370]. - Cash and cash equivalents increased to $156 million in 2025, up from $122 million in 2024, a growth of 28.0%[370]. - Earnings per share (diluted) for 2025 was $3.27, compared to $3.05 in 2024, reflecting an increase of 7.2%[373]. Market Trends - The health care distribution industry is benefiting from macro trends such as an aging population and increased health care awareness, which stimulate demand for products and services[21]. - Customer consolidation is leading to more procedures being performed in alternate care settings, favoring distributors that provide a broad array of products at competitive prices[22]. - The U.S. population aged 45 and older is expected to grow by approximately 10% between 2025 and 2035, driving demand for health care services[45]. Compliance and Regulatory Environment - Compliance with evolving governmental regulations remains a priority, as changes could impact operations and financial performance[57]. - The Drug Supply Chain Security Act (DSCSA) requires trading partners to maintain electronic documentation for prescription drugs, with a stabilization period extended to November 27, 2024[61]. - The FDA has set new deadlines for compliance with DSCSA requirements, including May 27, 2025, for manufacturers and repackagers, and August 27, 2025, for wholesale distributors[61]. - The EU Medical Device Regulation (EU MDR) imposes stricter compliance requirements for medical devices, including enhanced traceability and post-market surveillance[72]. - The transitional period for certain medical devices under the EU MDR has been extended until December 31, 2027, for higher-risk devices[75]. - The FDA's unique device identification (UDI) system mandates that medical devices include UDIs on labels and packages, with compliance timelines varying by device risk classification[64]. - Compliance with legal requirements may lead to delays in product release or distribution, potentially resulting in financial losses and reputational harm[77]. - The company is subject to heightened enforcement activity regarding the storage, sale, and distribution of controlled substances under the Controlled Substances Act[65]. - Antitrust and consumer protection laws may result in civil and criminal penalties for violations, impacting the company's operations[78]. Employee Relations and Culture - The company employs over 25,000 people, with approximately 48% based in the United States and 52% outside the United States[116]. - About 14% of the company's employees are subject to collective bargaining agreements, indicating strong labor relations[116]. - The company has implemented a continuous listening program, including The Pulse Global Culture Survey, to gather feedback from employees on their experience[118]. - The company's inclusive culture was identified as a top strength in The Pulse Global Culture Survey for the fourth consecutive time in 2025[121]. - The company aims to foster a connected and caring community for employees, enhancing their sense of inclusion, belonging, and purpose[120]. Strategic Initiatives - The company aims to increase penetration of its existing customer base, which exceeds one million customers worldwide[46]. - The company plans to pursue strategic acquisitions and joint ventures to enhance its geographic footprint and access new products and technologies[46]. - The company is focused on expanding its dental full-service model and medical offerings in new markets through direct sales and partnerships[50]. Cash Flow and Investments - Net cash provided by operating activities increased to $712 million in 2025 from $500 million in 2023, reflecting a 42% increase[1]. - Cash used in investing activities decreased to $400 million in 2025 from $1,135 million in 2023, indicating a reduction of 65%[1]. - Net cash used in financing activities was $188 million in 2025, a significant improvement compared to $701 million provided in 2023[1]. - The company maintained a strong balance sheet and diversified investments to manage credit risks effectively[345]. Foreign Currency and Interest Rate Risks - As of December 27, 2025, the fair value of forward foreign currency exchange agreements was $(20) million, with net investment designated EUR/USD forward contracts having notional values of approximately €300 million[347]. - A hypothetical increase of 25 basis points in the average outstanding balance of the revolving credit facility would increase interest expense by $0.5 million[352]. - A 5% increase in the value of the Euro to the USD would decrease the fair value of the forward contracts by $18 million[347].