Henry Schein forecasts 2025 profit below estimates on weak demand for dental products (updated)

Henry Schein

25/02/2025 15:39

Adds share movement in paragraph 2, company's comments in paragraphs 8 and 9

By SiddhiPrabhanjan Mahatole and Mariam Sunny

Feb 25 (Reuters) - Henry Schein HSIC.O forecast annual profit below Wall Street estimates on Tuesday as the dental and medical products distributor faces tepid demand amid persistent inflation.

Shares of the company fell nearly 5% to $73.96 in early trading.

Higher prices have squeezed customer budgets, forcing them to cancel or postpone non-urgent procedures such as orthodontic treatments and higher-end restorative dental procedures.

In recent months, investors have pressured the company to compete better with larger distributors such as Cardinal Health CAH.N.

In January, private equity firm KKR KKR.N took a 12% stake in Henry Schein to become the company's largest non-index fund shareholder and reached a deal to add members to its board.

The 2025 outlook "highlights what remains a tough end market as well as sets the stage for Henry Schein to execute on its operational improvements, supported by its recent addition of KKR as a sizable investor and new Board additions," Leerink Partners analyst Michael Cherny said in a research note.

The company expects 2025 adjusted per-share profit in the range of $4.80 to $4.94, below analysts' estimates of $4.99, according to data compiled by LSEG.

Henry Schein expects growth of zero to 2% in the core dental market, CFO Ronald South said on a call with analysts, adding that to grow 2% "could be challenging."

The company said it has lost market exclusivity for one of its key orthodontic treatments, driving more customers to cheaper options.

The New York-based distributor expects annual sales growth of about 2% to 4% from $12.67 billion reported in 2024. Analysts estimated 2025 sales of $13.19 billion.

Total revenue for the quarter came in at $3.19 billion, below estimates of $3.29 billion.

The company said it recorded restructuring costs of about $37 million in the quarter ended December 28.

Henry Schein posted a quarterly adjusted profit of $1.19 per share, missing estimates of $1.21 per share.

 (Reporting by Siddhi Mahatole and Mariam Sunny in Bengaluru; Editing by Sahal Muhammed)

 ((SiddhiPrabhanjan.Mahatole@thomsonreuters.com;))