Henry Schein Reports Q2 Results: Dental Sales Surge, Medical Revenues Decline

USA: Henry Schein has unveiled its second-quarter financial results, which showcased a mixed performance when compared to market expectations.

Henry Schein’s shares experienced a 2.5% drop to $76.11 each as the market digested the second-quarter results. In contrast, MassDevice’s MedTech 100 Index, encompassing major medical device companies, registered a 0.5% increase.

Earnings and Revenue Snapshot

The company reported profits of $140 million, equivalent to $1.06 per share, on sales of $3.1 billion for the quarter ending on July 1, 2023. Despite a 2.3% growth in sales, Henry Schein’s bottom-line figures showed a decline of 12.5%.

Factoring out one-time items, the adjusted earnings per share stood at $1.31, surpassing Wall Street’s predictions by 3 cents. However, analysts’ forecasts for sales had anticipated a slightly higher figure at $3.13 billion.

Dental Sales Surge, Medical Revenues Slip

Diving into the specifics, Henry Schein’s global dental sales exhibited a notable ascent, totalling $2 billion for the quarter. This marked a significant 5.6% year-over-year increase, attributed to heightened patient traffic within its North America dental businesses.

Contrastingly, the medical sector reported sales of $1 billion, witnessing a 4.6% decline. Remarkably, internal sales showed a 2% rise after excluding personal protective equipment products and COVID-19 test kits. Reduced instances of flu cases in comparison to the previous year translated to lower point-of-care diagnostic test and related product sales.

CEO’s Perspective

Stanley M. Bergman, Chairman and CEO of Henry Schein, offered his insights on the results, stating, “Today, we are reporting solid results for the second quarter driven by our North America dental businesses with strong equipment and steady general merchandise sales, and continuing strength in sales of our technology and value-added services, implants, biomaterials, and endodontic products.”

Bergman emphasised the positive trend in dental service demand and customer confidence, which he believes is demonstrated by the investments made by their clientele in their practices.

Future Outlook

Henry Schein maintained its previous guidance for 2023, reaffirming its projection of adjusted earnings per share ranging between $5.18 and $5.35, along with sales growth anticipated to fall within the bracket of 1% to 3%.