HENRY SCHEIN INC (HSIC) Q1 2026 Earnings Call Transcript
Bullish Medical - Equipment & Services 9.37B USA
Next Earnings
2026-05-12
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Henry Schein delivered solid Q4 results, exceeded 2025 guidance, advanced the BOLD+1 strategy with notable AI and e-commerce initiatives, and issued 2026 guidance with a solid, back-half earnings trajectory under a new CEO.
⭐ Key Highlights
Q4 results beat guidance
Fourth quarter sales growth of 7.7% (5.8% constant currency) and GAAP/non-GAAP margins largely in line with targets, with non-GAAP operating income near 50% from high-growth, high-margin businesses.
BOLD+1 progress and value creation
Significant progress on the BOLD+1 plan, including nearing 50% of operating income from high-growth/high-margin segments and multiple cost/price optimization initiatives expected to deliver over $200 million of operating income improvement over the next few years.
Henry Schein One and AI initiatives
Rollout of henryschein.com progressing; AWS AI partnership integrating generative AI into Dentrix Ascend, Dentex, and Dentally, plus new AI tools like Image Verify for image quality and workflow enhancements.
Strategic leadership transition
Fred Lowery named new CEO, effective next week, bringing experience from Thermo Fisher and a focus on growth, customer value, and execution.
2026 guidance and margin dynamics
2026 guidance issued: sales growth 3-5% vs 2025, non-GAAP EPS of $5.23-$5.37 (up 5-8%), mid-single-digit 2026 adjusted EBITDA, tax rate ~24%, with earnings weighted toward the second half of the year due to value-creation investments.
✔Positive Signals
- Q4 sales growth outpaced expectations and guided full-year 2026 results
- Non-GAAP operating margin stable year-over-year despite mix shift
- Progress toward 50%+ contribution from high-growth/high-margin businesses (BOLD+1)
- Henry Schein One AI integrations with AWS and new AI tools (Image Verify, real-time documentation assistant)
- Strong cash generation and substantial share repurchase activity in Q4
✖Negative Signals
- 2026 guidance excludes ongoing restructuring costs and related items
- Gross margin modestly pressured by mix toward value implants vs premium implants
- Back-end-loaded earnings contributions due to upfront investments in value-creation initiatives
- Reassessment of remeasurement gains in 2026 introduces some earnings uncertainty
- Tariff environment and potential pricing pressures require ongoing mitigation strategies
📊Financial Results
- Global Q4 sales of $3.4 billion, up 7.7% YoY (5.8% CC, 1.9% FX), with acquisitions contributing 0.9% growth
- GAAP Q4 net income $101 million ($0.85/diluted share); non-GAAP net income $160 million ($1.34/diluted share)
- Q4 Adjusted EBITDA $291 million, up 8.4% YoY from $270 million
- Full-year 2025 non-GAAP EPS $4.97; 2025 GAAP effective tax rate 22.7% (non-GAAP 23.7% for full year)
- Share repurchase: ~2.8 million shares repurchased in Q4 for $200 million; approx. $780 million remaining authorization
🔮Future Guidance
- 2026 sales growth guidance of 3% to 5% over 2025
- 2026 non-GAAP diluted EPS guidance of $5.23 to $5.37, up 5% to 8% vs 2025
- 2026 adjusted EBITDA expected to grow in the mid-single digits vs 2025's $1.1 billion
- Estimated non-GAAP effective tax rate of ~24% for 2026
- Earnings growth expected to be more weighted to the second half of 2026 due to value-creation initiatives
💡Interesting Insights
- Private-label and DSO-focused mix shift appear to be a key lever for margin and growth beyond traditional brands
Detailed Analysis
AI-generated summary of HENRY SCHEIN INC earnings call transcript.
Henry Schein highlighted sustained momentum across all segments in Q4'25, drove growth through its high-growth/high-margin businesses toward a 50% operating income contribution, and advanced its BOLD+1 initiatives including global e-commerce rollout and AI integrations with AWS. The company also announced the transition to a new CEO, Fred Lowery, while reaffirming 2026 guidance of 3-5% revenue growth and 5-8% EPS growth, backed by cost savings and margin-improvement efforts. Management noted ongoing benefits from private-label expansion, a robust cash flow generation with $381 million operating cash flow in Q4, and a continued focus on monetizing AI-driven workflows and enhanced practice management for dental and medical customers. The outlook anticipates stronger earnings in the back half of 2026 as value-creation programs mature, with a mid-single-digit 2026 adjusted EBITDA and a ~24% non-GAAP tax rate.
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