Group 1: Earnings Performance - Henry Schein reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and showing an increase from $1.10 per share a year ago, representing an earnings surprise of 3.60% [1] - The company posted revenues of $3.17 billion for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 1.84%, remaining unchanged from year-ago revenues [2] Group 2: Stock Performance and Outlook - Henry Schein shares have declined approximately 5.6% since the beginning of the year, compared to a decline of 3.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.18 on revenues of $3.22 billion, and for the current fiscal year, it is $4.82 on revenues of $12.99 billion [7] Group 3: Industry Context - The Medical - Dental Supplies industry, to which Henry Schein belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Data and Key Metrics Changes - Global sales for the first quarter of 2025 were $3.2 billion, down 0.1% compared to the first quarter of 2024, with a 1.5% decrease due to foreign currency exchange and a 1.2% growth from acquisitions [26][27] - GAAP operating margin improved by 81 basis points to 5.53%, while non-GAAP operating margin increased by 14 basis points to 7.25% [27] - GAAP net income for the first quarter was $110 million or $0.88 per diluted share, compared to $93 million or $0.72 per diluted share in the prior year [27] - Non-GAAP net income was $143 million or $1.15 per diluted share, compared to $143 million or $1.10 per diluted share in the prior year [28] Business Line Data and Key Metrics Changes - U.S. Dental merchandise sales grew low single digits, while U.S. Dental equipment sales declined 8.9% due to a deferral of approximately $20 million in sales from Q4 2023 to Q1 2024 [30][31] - U.S. Medical distribution sales grew by 4.7% after excluding PPE products and COVID test kits, with Home Solutions business experiencing a total sales growth of 23% [31][32] - Global Specialty Products Group saw constant currency sales growth of 4.3%, with strong growth in the DACH region and Latin America [32][33] Market Data and Key Metrics Changes - International Dental merchandise sales grew 1.1% in constant currency, while international Dental equipment sales grew 4.3% driven by strong growth in Canada and Central Europe [32] - The U.S. implant market was slightly down, but the company maintained market share and saw strong sales growth in Europe, particularly in Germany [21][33] Company Strategy and Development Direction - The company is advancing its Bold plus One strategic plan, focusing on operational efficiency, enhancing customer experience, and growing its digital footprint [9][10] - The establishment of two main business units, the Global Distribution and Value Added Service Group and the Global Technology Group, aims to streamline operations and improve performance [9][10] - The company expects high single-digit to low double-digit earnings growth by executing its strategic initiatives [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business despite a slow start in January due to weather-related events, with sales performance improving in February and March [6][8] - The overall mood in the dental and medical markets is stable, with increased patient traffic and investment in practices [50][62] - Management acknowledged the potential impact of tariffs but believes current actions will mitigate financial effects [24][58] Other Important Information - The company repurchased approximately 2.3 million shares at an average price of $71.58 per share, totaling $161 million [34] - The company maintains its 2025 financial guidance, expecting non-GAAP diluted EPS in the range of $4.80 to $4.94 [38] Q&A Session Summary Question: Can you talk about the dollar's impact on revenue guidance? - The company experienced a 1.5% headwind from foreign exchange in Q1, but expects foreign exchange to be neutral for the remainder of the year [44][45] Question: What is the current environment in April? - April showed decent performance, with stable traffic in dental distribution and solid growth in medical sales due to increased patient visits [47][50] Question: Are there any adjustments to guidance inputs? - The company maintains its sales guidance, expecting growth to be largely internally generated with foreign exchange being neutral [56] Question: How is the company managing tariff impacts? - The company is diversifying sourcing to mitigate tariff impacts and is working closely with suppliers and customers [58][59] Question: What is the current state of the dental capital equipment market? - Demand for dental equipment remains healthy, with no significant declines in orders observed [109]

Financial Performance - The company reported total sales of $3.168 billion in Q1 2025, a decrease of 0.1% compared to $3.172 billion in Q1 2024 [17, 56] - Non-GAAP diluted EPS increased by 4.5% from $1.10 in Q1 2024 to $1.15 in Q1 2025 [14, 56] - Adjusted EBITDA grew by 1.7% from $255 million in Q1 2024 to $259 million in Q1 2025 [14, 17, 59] - The company is maintaining its 2025 guidance, including Non-GAAP EPS of $4.80 to $4.94 and total sales growth of +2% to +4% [10, 50] Segment Performance - Global Distribution and Value-Added Services Group sales grew by 1.5% excluding PPE and COVID test kits [14, 24] - Global Specialty Products Group sales increased by 4.3% due to gains in implants and biomaterials [14, 27, 28] - Global Technology Group sales grew by 3.4%, driven by practice management systems [14, 33, 35] Strategic Initiatives - The company is advancing its BOLD+1 Strategic Plan, expecting high-growth, high-margin businesses to contribute over 50% of total operating income by 2027, plus over 10% from corporate brand products [10] - The company invested $31 million in capital expenditures and $51 million in acquisitions in Q1 2025 [41] - $161 million was used for share repurchases in Q1, with $718 million remaining under the share repurchase authorization [41]

Financial Performance - First-quarter 2025 GAAP diluted EPS was $0.88, a growth of 22% compared to Q1 2024[6] - First-quarter 2025 non-GAAP diluted EPS was $1.15, reflecting a growth of 4.5% compared to Q1 2024[6] - Total net sales for Q1 2025 were $3.2 billion, with constant currency sales growth of 1.4% compared to Q1 2024[7] - Global Medical Distribution sales increased by 3.0% in constant currencies compared to Q1 2024, with as-reported sales up by 2.9%[12] - Global Specialty Products sales grew by 4.3% in constant currencies compared to Q1 2024, with as-reported sales increasing by 2.0%[12] - Net sales for Q1 2025 were $3,168 million, a slight decrease of 0.1% compared to $3,172 million in Q1 2024[32] - Gross profit for Q1 2025 was $1,000 million, down from $1,012 million in Q1 2024, reflecting a gross margin of 31.5%[32] - Operating income increased to $175 million in Q1 2025, compared to $150 million in Q1 2024, representing a growth of 16.7%[32] - Net income attributable to Henry Schein, Inc. rose to $110 million in Q1 2025, up from $93 million in Q1 2024, marking an increase of 18.3%[32] - Basic earnings per share increased to $0.89 in Q1 2025, compared to $0.72 in Q1 2024, reflecting a growth of 23.6%[32] - Net income attributable to Henry Schein, Inc. for Q1 2025 was $110 million, representing a 17.7% increase from $93 million in Q1 2024[42] - Diluted EPS attributable to Henry Schein, Inc. increased by 22.2% to $0.88 in Q1 2025, up from $0.72 in Q1 2024[42] - Non-GAAP net income attributable to Henry Schein, Inc. remained stable at $143 million, with a slight increase of 0.5% compared to Q1 2024[42] - Non-GAAP diluted EPS attributable to Henry Schein, Inc. rose by 4.5% to $1.15 in Q1 2025, compared to $1.10 in Q1 2024[42] Shareholder Actions - The company repurchased $161 million of common stock, approximately 2.3 million shares, during Q1 2025[10] Guidance and Strategic Plans - The company maintained its 2025 non-GAAP diluted EPS guidance of $4.80 to $4.94, reflecting growth of 1% to 4% compared to 2024[19] - The company is focused on enhancing operational efficiency and customer experience as part of its refreshed BOLD+1 Strategic Plan for 2025 to 2027[4] Restructuring and Costs - The company recorded $25 million in restructuring costs in Q1 2025, aiming for annual savings of $75 million to $100 million by the end of 2025[9] - Restructuring costs for Q1 2025 were reported at $25 million pre-tax, up from $10 million in Q1 2024, with net restructuring costs of $17 million[43] - Acquisition intangible amortization for Q1 2025 was $43 million pre-tax, slightly down from $46 million in Q1 2024, with net amortization of $27 million[44] - Costs associated with shareholder advisory matters amounted to $8 million in Q1 2025[45] Cash Flow and Assets - Total current assets increased to $4,037 million as of March 29, 2025, compared to $3,983 million at the end of 2024[34] - Total assets grew to $10,480 million as of March 29, 2025, up from $10,218 million at the end of 2024[34] - Cash and cash equivalents at the end of Q1 2025 were $127 million, a slight increase from $122 million at the beginning of the period[37] - The company reported a net cash provided by operating activities of $37 million in Q1 2025, down from $197 million in Q1 2024[37] Sales and Services - Total global distribution and value-added services sales decreased by 0.7% to $2,676 million in Q1 2025 compared to $2,693 million in Q1 2024[39] Other Financial Metrics - Adjusted EBITDA for Q1 2025 was $259 million, compared to $255 million in Q1 2024[12] - Adjusted EBITDA for Q1 2025 was reported at $259 million, an increase from $255 million in Q1 2024[47] - The change in contingent consideration was recorded at $2 million in Q1 2025, compared to $15 million in Q1 2024[45] - The company received $20 million in insurance proceeds related to a cyber incident, with $15 million net of taxes recognized in Q1 2025[44]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Henry Schein, with a focus on how actual results compare to estimates, which could significantly impact stock price [1][2] Company Summary - Henry Schein is expected to report quarterly earnings of $1.11 per share, reflecting a year-over-year change of +0.9%, with revenues projected at $3.23 billion, up 1.8% from the previous year [3] - The consensus EPS estimate has been revised 1.02% lower in the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Henry Schein is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.89%, suggesting a likely earnings beat [10][11] - Historically, Henry Schein has beaten consensus EPS estimates three out of the last four quarters, indicating a positive trend [13] Industry Context - Cardinal Health, another player in the Zacks Medical - Dental Supplies industry, is expected to post earnings of $2.15 per share, with a year-over-year change of +3.4% and revenues of $55.03 billion, up 0.2% [17] - Cardinal Health's consensus EPS estimate has been revised 0.1% lower, but a higher Most Accurate Estimate has resulted in an Earnings ESP of 0.54%, suggesting a likely earnings beat [18]

It has been about a month since the last earnings report for Henry Schein (HSIC) . Shares have lost about 3.9% in that time frame, outperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Henry Schein due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It ...

Group 1 - The health care distributor Henry Schein (NASDAQ: HSIC) is viewed positively at its current price level, indicating a bullish outlook for the stock [1] - The analysis employs a technical approach focusing on price action, momentum, volume, and relative strength to support the bullish thesis for HSIC [1] - The article reflects the author's intent to build financial assets for retirement, highlighting a strategy that includes both long and short trading opportunities [1] Group 2 - The author expresses a commitment to developing winning trades and aims to learn from feedback in the comments section [1]

Group 1 - Henry Schein is identified as a notable company for investors, operating as a solutions provider in the healthcare sector [1] - The company is involved in generating cash flow, which is essential for value and growth prospects [1] Group 2 - Crude Value Insights offers an investment service focused on oil and natural gas, emphasizing cash flow analysis [2] - Subscribers have access to a stock model account and in-depth analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - Global sales for Q4 2024 were $3.2 billion, reflecting a 5.8% increase compared to Q4 2023, with LCI sales growth of 5.5% [31][32] - GAAP operating margin improved to 4.86%, a 358 basis point increase year-over-year, while non-GAAP operating margin was 7.46%, a 260 basis point improvement [33][34] - Q4 2024 GAAP net income was $94 million ($0.74 per diluted share), compared to $18 million ($0.13 per diluted share) in the prior year [35] Business Line Data and Key Metrics Changes - Global Distribution and Value-Added Services Group sales were $2.7 billion, with a 5.9% growth, including LCI growth of 5.8% [38] - Global Specialty Products Group sales reached $368 million, reflecting a 7.2% growth, with LCI growth of 5.0% [42] - Global Technology Group sales were $160 million, with total sales growth of 2.4% and LCI sales growth of 2.1% [43] Market Data and Key Metrics Changes - U.S. dental distribution LCI sales grew 5.9%, with dental merchandise growth of 4.8% [39] - International dental distribution LCI sales grew 7.3%, with strong growth in Canada and Europe [20][41] - U.S. medical distribution LCI sales grew 4.5%, negatively impacted by the timing of the flu season [40] Company Strategy and Development Direction - The company completed its 2022 to 2024 BOLD+1 Strategic Plan, achieving over 40% of operating income from high-growth, high-margin businesses [9][10] - An updated '25 to '27 BOLD+1 Strategic Plan has been launched, focusing on simplifying organizational structure and driving synergies across business units [11][12] - The company aims for high single-digit to low double-digit earnings growth in the long term, supported by strategic initiatives and restructuring plans [11][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the business, despite modest growth expectations in dental and medical markets [10][50] - The company anticipates a challenging environment in 2025, with investments in technology and a return to historical levels of incentive compensation impacting margins [49][102] - Management noted that the cyber incident is now behind them, allowing for a focus on growth and operational improvements [11] Other Important Information - The company repurchased approximately 1.1 million shares for $75 million in Q4 2024, with a total of $385 million spent on share repurchases for the full year [47] - Restructuring expenses in Q4 were $37 million, with expected annual run rate savings of $75 million to $100 million by the end of 2025 [44][45] - The company has authorized an additional $500 million for share repurchases, including a commitment to an accelerated share repurchase program [48] Q&A Session Summary Question: Revenue guidance and underlying assumptions - Management expects modest growth in dental and medical markets, with limited acquisition growth included in overall revenue growth [60][61] Question: Breakdown of new reporting structure - Management indicated that market growth is expected to be lower than previously anticipated, with specific segments facing challenges [62][65] Question: Fourth quarter revenue shortfall - The shortfall was attributed to flat patient traffic and a slow end to the quarter due to the timing of Christmas and the flu season [70][71] Question: Share dynamics in the fourth quarter - Management reported that market share stabilized in Q4, with confidence in regaining market share moving forward [75] Question: Specialty operating margins - Specialty margins are impacted by lower-margin businesses and management expects operating margin growth over time [81][83] Question: Dental implant growth and Medicare Advantage payer changes - Management noted healthy growth in Europe for dental implants, with no significant impact from changes in Medicare coverage observed so far [85][88] Question: KKR agreement and value creation plan - KKR is expected to provide strategic support, but their involvement is pending regulatory clearance [91][92] Question: Sales structure normalization - Management clarified that changes in sales commission structure are aimed at driving growth, with a return to normal incentive compensation expected [125] Question: Impact of tariffs on guidance - The company has shifted supply chains to mitigate tariff impacts and believes it is well-positioned to manage potential tariff-related challenges [126][129]

User Base and Market Presence - The company has an active user base of approximately 100,000 practices and 321,000 consumers utilizing various software solutions as of December 28, 2024[41]. - The company aims to increase penetration of its existing customer base, which currently exceeds one million customers worldwide[50]. - The company develops and distributes a broad portfolio of dental implants and digital solutions, serving customers in approximately 90 countries[39]. Financial Performance and Sales - In 2024, dental merchandise accounted for 37.3% of consolidated net sales, while total dental products represented 52.7% of sales[45]. - The medical segment saw a slight increase in sales to 32.2% in 2024, compared to 31.7% in 2023[45]. - Seasonal fluctuations in sales are expected to continue, with higher sales typically occurring in the third and fourth quarters due to seasonal product demand[55]. - The company has experienced increased costs and shortages of purchased components, negatively impacting profit margins and sales[146]. - The company is exposed to risks associated with product liability and potential recalls related to corporate brand products, which could impact supplier relationships[157]. Strategic Initiatives and Growth Plans - The company is committed to enhancing its product offerings through organic investment and acquisitions to better serve customer needs[33]. - The company plans to pursue strategic acquisitions to expand its geographic footprint and access new products and technologies[50]. - The company aims to grow its specialty brands and technology solutions both organically and inorganically under the BOLD+1 Strategic Plan[147]. - The company has a strategic focus on expanding its Global Technology and Global Specialty Products segments[150]. Regulatory Compliance and Legal Risks - The DSCSA requires wholesalers and 3PLs to submit annual reports to the FDA, including information on each state where they are licensed[68]. - The UDI regulations mandate that labelers include unique device identifiers on medical device labels and packages, with compliance phased in starting from high-risk devices[69]. - The EU MDR significantly modifies regulatory compliance requirements for medical devices, including stricter clinical evaluation and quality system requirements[78]. - Compliance with legal requirements may necessitate delays in product release or voluntary recalls, potentially leading to financial losses and reputational harm[82]. - The company is subject to heightened enforcement activity regarding the storage, sale, and distribution of controlled substances under the Controlled Substances Act[71]. Employee Relations and Workforce Development - The company employs approximately 25,000 people, with 49% based in the United States and 51% outside the United States[121]. - Approximately 13% of the company's employees are subject to collective bargaining agreements, and the company believes its relations with employees are excellent[121]. - The company has rolled out a continuous listening program to gather feedback from employees, indicating a commitment to improving employee experience[123]. - The company has seen an increase in participation in professional development training programs, with employees reporting high utilization of skills learned[127]. - The company launched its seventh Employee Resource Group (ERG) in 2024, focusing on inclusivity and support for employees with disabilities[125]. Market Competition and Industry Trends - The health care products distribution industry is highly competitive, with significant competition from major manufacturers and distributors, which could adversely affect the company's margins and product availability[167]. - The company competes primarily on price, product breadth, e-commerce capabilities, and customer service in the North American market[27]. - The dental industry is expected to see increased expenditures as the population segment aged 45 and older grows, alongside rising demand for new technologies[51]. Cybersecurity and Operational Risks - The company experienced a cybersecurity incident in October 2023 that disrupted key business operations and adversely impacted financial results for Q4 2023 and the full year 2023[166]. - The incident led to significant remediation costs and has residual impacts on financial results in 2024[166]. - The company relies on information systems for critical operations, and any disruption or cybersecurity breach could lead to significant financial and operational impacts[164]. Economic and Market Conditions - Uncertain global and domestic macro-economic conditions may adversely affect the company's financial condition and operating results[172]. - The company has experienced inflationary pressures, including higher freight costs and interest expenses, impacting operational results[172]. - The health care industry is undergoing significant changes due to political, economic, and regulatory influences, which could materially affect the company's profitability[169]. Compliance with Privacy and Data Protection Laws - The company is subject to numerous evolving privacy laws, including GDPR, CCPA, and China's PIPL, which could impose significant compliance costs and penalties[195][196][197]. - Noncompliance with GDPR can result in penalties of up to EUR 20 million or 4% of global revenues, while China's PIPL carries maximum penalties of CNY 50 million or 5% of annual revenue[196][197]. - The CCPA, effective January 1, 2020, establishes new data privacy rights and statutory damages for violations, with the CPRA enhancing these requirements from January 1, 2023[199]. Financial Management and Risk Mitigation - The company maintains a strong balance sheet and diversifies investments to manage credit risks[380]. - The company engages in hedging programs using primarily foreign currency forward contracts to limit the impact of foreign currency exchange rate fluctuations on earnings[381]. - Disruptions in financial markets may adversely affect the availability and cost of credit, impacting the company's ability to make scheduled payments or refinance obligations[214].