Henry Schein Stock Falls on Q2 Earnings Miss, Revenues Top

Henry Schein, Inc. HSIC registered second-quarter 2025 adjusted earnings per share (EPS) of $1.10, down 10.6% from the year-ago period’s figure. The bottom line also missed the Zacks Consensus Estimate by 6.8%.

Excluding adjustments such as restructuring costs, acquisition intangible amortization, and others, the company reported a GAAP EPS of 70 cents compared with the year-earlier quarter’s 80 cents.

HSIC’s Q2 Revenues in Detail

Henry Schein reported net sales of $3.24 billion, up 3.2% year over year. The metric also beat the Zacks Consensus Estimate by 0.6%.

Meanwhile, constant currency net sales increased 2.7% year over year.

Following the earnings announcement, HSIC stock declined 4.7% in pre-market trading today.

HSIC’s Q2 Segmental Analysis

Global Distribution and Value-Added Services

Sales in the segment rose 2.9% year over year on a reported basis (up 2.4% in constant currencies) to $2.73 billion. Our model forecast was $2.66 billion.

Global Dental Distribution merchandise sales for the quarter fell 0.4% in constant currencies. U.S. volume increased at lower average selling prices, partly due to glove pricing and time-limited targeted sales initiatives.

Global Dental Distribution equipment sales increased 1.6% at cc. Sales growth was strong internationally and offset by lower sales in the United States, resulting from a short-term economic uncertainty from tariffs.

Global Medical Distribution sales for the quarter jumped 6% at cc, reflecting increased patient traffic to physician offices, strong growth in the home solutions business and growth from acquisitions.

Global Value-added Services sales for the quarter increased 3.7% at cc. Sales growth was impacted by lower sales in the practice transitions business as a result of a high prior-year comparable.

Global Specialty Products

In the second quarter, the segment’s sales totaled $386 million, up 4.2% on a reported basis (3.3% in constant currencies). This reflected continued growth in implant and biomaterial sales as well as endodontic consumables. Our model forecast was $377.4 million.

Global Technology

The segment’s sales were $167 million, up 7.4% on a reported basis and 6.6% at cc, led by strong sales growth in practice management systems, including Dentrix Ascend and Dentally cloud-based solutions, as well as in revenue cycle management products. Our model projected $160.5 million for this segment.

HSIC’s Margin Performance

In the reported quarter, the gross profit totaled $1.02 billion, representing a 0.2% decrease year over year. The gross margin contracted 110 basis points (bps) to 31.4% due to a 5% rise in the cost of sales.

SG&A expenses declined 0.4% to $778 million in the quarter under review. The adjusted operating profit was $238 million, up 0.4% year over year. The adjusted operating margin contracted 21 bps year over year to 7.3%.

Liquidity Position of HSIC

Henry Schein exited the second quarter of 2025 with cash and cash equivalents of $145 million compared with $127 million at the end of the first quarter.

Henry Schein, Inc. Price, Consensus and EPS Surprise

Henry Schein, Inc. price-consensus-eps-surprise-chart | Henry Schein, Inc. Quote

Cumulative net cash provided by operating activities at the end of the second quarter was $157 million, down from the year-ago figure of $493 million.

During the reported quarter, HSIC repurchased nearly 3.7 million shares of its common stock at an average price of $70.88 per share for a total of approximately $259 million. The company had approximately $432 million authorized and available for future stock repurchases as of the end of the second quarter.

HSIC’s 2025 Guidance

The company maintained its adjusted EPS forecast in the range of $4.80-$4.94 for the year. The figure indicates 1-4% growth from the reported figure of 2024. The Zacks Consensus Estimate for the metric is currently pegged at $4.85 per share.

Projected revenue growth for 2025 also remains unchanged at nearly 2-4% compared with the year-ago figure. The Zacks Consensus Estimate for revenues is currently pegged at $12.96 billion.

Our Take on HSIC

Henry Schein missed on earnings but beat revenues in the second quarter of 2025. The bottom line was also down slightly on a year-over-year basis. The contraction of both the margins is discouraging.

On a promising note, the company has entered the second quarter with solid momentum, reflecting confidence in its core business fundamentals. Henry Schein is advancing its BOLD+1 Strategic Plan, which has been refreshed for 2025 to 2027. The plan is focused on growing the distribution business through increasing operational efficiency and enhancing customer experience, growing the dental and medical specialty businesses and corporate brand products, and further developing its digital footprint and digital solutions.

HSIC’s Zacks Rank & Key Picks

HSIC currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Boston Scientific BSX, Cardinal Health CAH and Cencora COR.

Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, reported a second-quarter 2025 adjusted EPS of 75 cents, which beat the Zacks Consensus Estimate by 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenues of $5.06 billion topped the Zacks Consensus Estimate by 2.3%. BSX has a long-term earnings growth rate of 14% compared with the industry’s 14.2%.

Cardinal Health, carrying a Zacks Rank #2 at present, posted third-quarter fiscal 2025 adjusted EPS of $2.35, which exceeded the Zacks Consensus Estimate by 9.3%. Revenues of $54.88 billion missed the Zacks Consensus Estimate by 0.3%.

CAH has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9%.

Cencora currently carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 adjusted EPS is currently pegged at $3.78 and the same for revenues is pinned at $80.33 billion.

Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings yield of 5.4% compares favorably with the industry’s 4.1%. 

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This article originally published on Zacks Investment Research (zacks.com).

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