Henry Schein's 2025 Outlook Hinges On Strong Second-Half Execution

Henry Schein Inc. (NASDAQ:HSIC) stock is trading lower on Tuesday after the company reported its second-quarter earnings.

The global healthcare solutions company reported adjusted earnings of $1.10 per share, down 10.6% year over year, missing the consensus of $1.20. Sales were $3.24 billion, beating the consensus of $3.22 billion.

As reported, total net sales increased by 3.3%, reflecting 1.9% internal sales growth, 0.8% sales growth from acquisitions, and a 0.6% sales increase resulting from foreign currency exchange.

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Global Distribution and Value-Added Services sales for the quarter increased 2.9%, and by 2.4% in constant currencies compared with the second quarter of 2024.

Total Global Distribution and Value-Added Services sales reached $2.73 billion, up from $2.65 billion a year ago.

Henry Schein said Global Dental Distribution equipment sales for the quarter increased 3.0%, and by 1.6% in constant currencies. Sales growth was strong internationally and offset by lower sales in the U.S., resulting from a slowdown in orders beginning in May due to short-term economic uncertainty resulting from tariffs, which then returned to normal by the end of the quarter.

Global Specialty Products sales for the quarter increased 4.2%, and by 3.3% to $386 million in constant currencies compared with the second quarter of 2024, reflecting continued growth in implant and biomaterial sales and endodontic consumables, offset partly by lower orthodontic sales.

Global Technology sales for the quarter increased 7.4%, and by 6.6% in constant currencies to $167 million, reflecting strong sales growth in practice management systems, including Dentrix Ascend and Dentally cloud-based solutions, as well as in revenue cycle management products.

“Partnering with KKR Capstone, we have engaged two leading global management consulting firms to support our efforts to enhance distribution gross margins, including accelerating sales of our owned-products portfolio, and to support our ongoing company-wide initiatives to increase efficiencies. We expect these projects, which expand on our BOLD+1 strategy, to start producing results towards the beginning of 2026, and will support our ongoing initiatives to drive superior customer satisfaction and our financial goal of high-single digit to low-double digit earnings growth,” said Stanley Bergman, Chairman and CEO of Henry Schein.

During the second quarter of 2025, the company recorded $23 million in restructuring costs and expects to achieve annual run-rate savings of over $100 million by the end of 2025.

Outlook

Henry Schein affirms fiscal 2025 adjusted earnings guidance of $4.80-$4.94 per share versus the consensus of $4.88.

The company maintains 2025 sales guidance of $12.43 billion-$13.18 billion compared to the consensus of $12.96 billion.

Adding a forward-looking perspective, investment firm William Blair said, “Management also provided informal 2026 guidance for high-single- to low-double-digit EPS growth as the business stabilizes in 2025 and it starts to see some early benefits of its partnership with KKR and two other consulting firms. Consensus for 2026 currently calls for 8% EPS growth, so this is a welcome update, and we look for more concrete details on what these partnerships entail on the second-quarter call.”

“Overall, updates are mixed, and while we acknowledge management’s execution on commercial/partner efforts, we expect second-half execution will be critical for durable valuation and share upside,” analyst Brandon Vazquez wrote in an investor note on Tuesday.

Price Action: HSIC stock is trading lower by 8.80% to $64.37 at last check Tuesday.

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