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Henry Schein shares fall on earnings and revenue miss

© Reuters.

MELVILLE, N.Y. – Henry Schein , Inc. (NASDAQ:), a global provider of health care solutions, reported lower-than-expected earnings for the fourth quarter, missing analyst estimates.

The company’s stock fell sharply by 6.91% premarket following the announcement, though it has since retraced most losses to trade down 1.35%.

The company posted an adjusted EPS of $0.66, which was $0.04 short of the consensus estimate of $0.70. Revenue also fell below expectations, coming in at $3 billion against the anticipated $3.04 billion.

Henry Schein’s fourth-quarter results were impacted by several factors, including acquisition-related expenses and adjustments, as well as an estimated $0.70 to $0.75 per diluted share from a cybersecurity incident. Despite these challenges, the company’s Chairman and CEO, Stanley M. Bergman, expressed satisfaction with the quarter’s performance, which he said reflected a solid recovery from last year’s cybersecurity incident.

For the full year 2023, Henry Schein reported a decrease in total net sales of 2.4% compared to 2022, with an internal sales decrease of 4.4%. The company’s GAAP net income for 2023 was $416 million, or $3.16 per diluted share, which included acquisition expenses and acquisition-related adjustments.

Looking ahead, Henry Schein introduced its guidance for the full year 2024, expecting an adjusted EPS in the range of $5.00 to $5.16. This projection reflects a growth of 11% to 15% compared to the 2023 adjusted EPS of $4.50. The midpoint of this guidance range is slightly below the analyst consensus of $5.11. The company also anticipates a full-year 2024 adjusted EBITDA growth of over 15%.

The 2024 guidance takes into account the continued recovery from the cybersecurity incident and the execution of the company’s strategic plan, which includes a pivot to higher-growth, higher-margin products and services. Despite the anticipated short-term residual impact on merchandise sales due to the cybersecurity incident, Henry Schein remains confident in strengthening its market position and achieving its financial goals.

In his statement, Bergman highlighted the company’s strategic initiatives and the expected growth trajectory, “We believe we are well positioned to grow the business in line with our financial goals of high-single-digit to low-double-digit operating income and earnings per share by continuing to execute on our BOLD+1 Strategic Plan.”

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