Henry Schein, Inc. (HSIC) Earnings & Analysis

Latest quarter

Henry Schein reported Q3 FY2026 adjusted earnings per share 16.4% above the consensus, while revenue matched expectations. Revenue was $3.5 billion, compared with $3.3 billion a year earlier, and diluted earnings per share rose to $1.06 from $0.84.

CFO Ronald South said U.S. dental merchandise sales growth was primarily driven by higher volume and market share gains. He said U.S. medical sales grew 1.0%, as home solutions growth helped offset lower diagnostic-product and vaccine sales. Global specialty products sales grew 6.1%, supported by implants in Europe and the U.S., partly offset by headwinds in Brazil.

Henry Schein’s gross margin rose to 31.8% from 30.7%, while operating margin rose to 5.56% from 4.91%. South said the quarter included a $0.19 per-share net benefit from tariff refunds; excluding that benefit and a prior-year remeasurement gain, adjusted non-GAAP diluted EPS rose 19.1% to $1.37.

The company generated $131.0 million in free cash flow, compared with $141.0 million a year earlier. South said Henry Schein repurchased $125 million of shares during the quarter.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Frederick Lowery said U.S. dental merchandise growth was “driven primarily by volume rather than price,” particularly among private practices and emerging dental service organizations. He attributed gains to company-owned and exclusive products, sales execution and deeper customer relationships. When analysts asked about the sources of growth, Lowery said promotions had helped build momentum in private practices, but declined to give further specifics for competitive reasons.

Lowery said the U.S. dental market and patient traffic were stable, although some patients were deferring discretionary procedures because of out-of-pocket costs. He said that portion of the market represented a relatively limited part of Henry Schein’s portfolio. For traditional equipment, Lowery said backlog was up from both the prior year and the previous quarter, and he expected growth to continue in Q4.

On pricing, Lowery said the company was covering cost inflation through pricing, productivity and lower-priced equivalent products, including its own brands. CFO Ronald South said those brands had also helped mitigate higher raw-material costs. South said value-creation benefits in the quarter were in line with internal expectations for both gross profit and administrative expenses.

Lowery said Henry Schein planned targeted fourth-quarter investments to win customers, increase sales to existing customers and turn occasional buyers into recurring customers. In response to questions about their effect on margins, he said the spending would not change the company’s value-creation commitment. South said the benefit already realized from those initiatives was included in year-to-date results and full-year earnings guidance.

South said softer demand for diagnostic kits and vaccines made medical sales lighter than expected in Q3. He said the company’s sales guidance incorporated a potential fourth-quarter benefit from flu-season timing. Lowery also said cloud practice-management platforms were adding approximately 200 net-new customers per month, primarily from private practices and emerging dental service organizations.

Guidance

Henry Schein raised its FY2026 non-GAAP diluted EPS guidance to $5.50–$5.56 from $5.29–$5.39. South said the revision reflected tariff refunds, targeted fourth-quarter investments and underlying business performance.

The company now expects adjusted EBITDA growth in the high single digits, compared with its previous mid- to high-single-digit outlook. South said the guidance assumes no significant additional tariff refunds or remeasurement gains for the rest of 2026.