Dental Equipment Distributor Henry Schein Reports Mixed Q2 Earnings, Cuts Guidance And Warns Slower Recovery From Cyberattack

Nov 03, 2024

On Tuesday, Henry Schein Inc (NASDAQ:HSIC) reported a second-quarter adjusted EPS of $1.23, down 6.1% year-over-year, beating the consensus of $1.22.

Sales were $3.10 billion, an increase of 1%, missing the consensus of $3.27 billion.

Sales growth reflects 4.0% growth from acquisitions, a 0.5% decrease resulting from foreign exchange rates, a 0.5% sales decrease from lower sales of personal protective equipment (PPE), primarily the result of lower glove pricing, and the pace of recovery from the cyber incident late last year.

Internal sales decreased by 2.4%, including a 0.5% decrease from lower PPE sales.

Global dental segment sales were $1.9 billion, down 1.7%, and medical segment sales increased by 5% to $1 billion.

Technology and Value-Added Services sales increased 10.8% (internal growth of 3.9%) to $0.2 billion.

“We delivered solid second quarter financial results, including strong operating cash flow, that reflected stable end markets. Gross margin continued to increase, driven by our strategies to expand our high-growth, high-margin products and services and by the successful performance of our recent acquisitions. We are experiencing improving sales trends in our distribution businesses, however, the pace of recovery in these businesses since the cyber incident late last year has been slower than anticipated,” said Stanley Bergman, Chairman and CEO.

Restructuring Plan: Henry Schein announced a restructuring plan that targets $75 million to $100 million in annual run-rate savings.

The company expects to record restructuring charges in the second half of 2024 and 2025.

The company’s board authorized an additional $500 million share repurchase program on July 31, 2024.

Guidance: “Given the challenging economic environment in certain markets, as well as this delay in recovery from the cyber incident, we are updating our 2024 full-year financial guidance,” Bergman added.

Henry Schein expects 2024 sales growth of approximately 4% – 6% over 2023, compared with prior guidance of 8%-10% growth. The previous guidance anticipated a stronger economy and a faster recovery from the cyber incident.

The company sees 2024 adjusted EPS of $4.70-$4.82, compared with prior guidance of $5.00 to $5.16 and the consensus of $5.06.

Price Action: HSIC stock is trading lower by 5.91% to $65.65 at the last check on Tuesday.

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This article Dental Equipment Distributor Henry Schein Reports Mixed Q2 Earnings, Cuts Guidance And Warns Slower Recovery From Cyberattack originally appeared on Benzinga.com

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