• Global Sales: $3.2 billion, down 0.1% compared to Q1 2024.
• Constant Currency Sales Growth: 2.0% excluding PPE and COVID test kits.
• GAAP Operating Margin: 5.53%, an 81 basis point improvement year-over-year.
• Non-GAAP Operating Margin: 7.25%, a 14 basis point improvement year-over-year.
• GAAP Net Income: $110 million or $0.88 per diluted share.
• Non-GAAP Net Income: $143 million or $1.15 per diluted share.
• Adjusted EBITDA: $259 million, compared to $255 million in Q1 2024.
• US Dental Merchandise Sales Growth: 0.7% excluding PPE products.
• US Dental Equipment Sales Decline: 8.9%, impacted by sales deferral from Q4 2023.
• US Medical Distribution Sales Growth: 4.7% excluding PPE and COVID test kits.
• Home Solutions Business Sales Growth: 23%, including 9% internal growth.
• International Dental Merchandise Sales Growth: 1.1% in constant currency.
• International Dental Equipment Sales Growth: 4.3% in constant currency.
• Global Specialty Products Group Sales Growth: 4.3% in constant currency, with 4.0% from acquisitions.
• Practice Management Software Growth: 20% increase in cloud-based customers.
• Share Repurchases: 2.3 million shares at an average price of $71.58 per share, totaling $161 million.
• Operating Cash Flow: $37 million in Q1 2025.
• 2025 Non-GAAP EPS Guidance: $4.80 to $4.94, weighted to the second half of the year.
• 2025 Total Sales Growth Guidance: 2% to 4% over 2024.

Release Date: May 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Henry Schein Inc (HSIC, Financial) reported a solid first quarter with sales growth accelerating throughout the quarter, despite a slow start in January due to weather-related events.
• The company is advancing its BOLD+1 Strategic Plan, focusing on operational efficiency, customer experience, and expanding its digital footprint.
• HSIC's home solutions business showed strong performance with a 23% total sales growth, including 9% internal growth.
• The global specialty products group experienced continued growth in implant and biomaterials, with strong sales in the DACH region and Latin America.
• The global technology group saw strong growth in practice management systems and revenue cycle management products, contributing to a 24% increase in operating income.

Negative Points

• Sales growth was negatively impacted by a strong US dollar, resulting in a 1.5% decrease attributable to foreign currency exchange.
• US dental equipment sales declined by 8.9%, affected by a deferral of sales from the fourth quarter of 2023 into the first quarter of 2024.
• The orthodontics segment experienced a decline in sales year over year as the company continues to restructure this business.
• The global value-added services segment saw a decrease in sales due to lower sales in the practice transitions business, which can fluctuate from quarter to quarter.
• The US implant market was slightly down in the quarter, reflecting weaker consumer sentiment for high-end dentistry.

Q & A Highlights

Q: Can you discuss the impact of the strong US dollar on your revenue guidance and its effect on the bottom line? A: Ronald N. South, Senior Vice President and Chief Financial Officer, explained that the first quarter experienced a 1.5% headwind from foreign exchange, primarily due to the euro. However, current exchange rates suggest a neutral impact for the rest of the year, and the sales guidance has been adjusted accordingly.

Q: How is the current macroeconomic environment affecting dental practice build-outs and equipment sales? A: Stanley Bergman, Chairman and CEO, noted that dental practice build-outs are increasing, with both new and existing practices investing in equipment. The market is stable, and despite higher interest rates, DSOs and other practices are adjusting and continuing their expansion plans.

Q: What measures are being taken to mitigate the impact of tariffs on your business? A: Ronald N. South stated that Henry Schein has diversified its sourcing to lower tariff countries and is working closely with suppliers and customers to mitigate financial impacts. The company is also offering alternative products and managing sourcing strategies to cushion the impact.

Q: Can you provide insights into the performance of the US implant market and new product launches? A: Stanley Bergman mentioned that the US implant market is slightly down, possibly due to consumer sentiment affecting high-end dentistry. However, Henry Schein is maintaining market share with new product launches like the Tapered Pro Conical implant and SmartShape Healer.

Q: How is the home solutions business performing, and what is driving its growth? A: Stanley Bergman highlighted that the home solutions business is experiencing strong growth, driven by expanding the footprint, adding referral sources, and effective reimbursement management. The business is approaching $400 million in annual revenue.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.