Henry Schein (NASDAQ:HSIC) reported fourth-quarter 2025 results on Feb. 24, 2026, highlighting what management described as its “highest sales growth in 15 quarters,” alongside progress on its 2025–2027 BOLD+1 strategic plan and an update to its leadership transition.
Leadership transition and strategic focus
Chairman and CEO Stanley Bergman opened the call by welcoming Fred Lowery, who is set to officially join the company as CEO next week, while Bergman will remain Chairman of the Board. Bergman said Lowery is joining from Thermo Fisher Scientific after 20 years and cited experience scaling businesses through acquisitions and organic growth, along with a “strong customer focus.”
Fourth-quarter results: sales growth and profitability
CFO Ron South said fourth-quarter global sales were $3.4 billion, up 7.7% year over year. Sales growth included 5.8% constant-currency growth, 1.9% benefit from foreign exchange, and 0.9% from acquisitions.
On profitability, South reported a fourth-quarter GAAP operating margin of 4.76%, down 10 basis points from the prior year, while non-GAAP operating margin was 7.42%, described as relatively flat year over year despite slightly lower gross margin driven primarily by product mix within the distribution and specialty groups.
Fourth-quarter GAAP net income was $101 million, or $0.85 per diluted share, compared with $94 million, or $0.74 per diluted share, in the prior-year period. On a non-GAAP basis, net income was $160 million, or $1.34 per diluted share, up from $149 million, or $1.19 per diluted share. Foreign exchange favorably impacted diluted EPS by about $0.02 versus the prior year. Adjusted EBITDA was $291 million, up from $270 million, or 8.4% growth.
Segment performance: equipment strength, specialty and technology growth
South said the global distribution and value-added services group delivered 7.0% sales growth. Key drivers included:
- U.S. dental merchandise sales growth of 3.6%, which management said included good volume growth driven by sales initiatives introduced earlier in the year.
- U.S. dental equipment sales growth of 10.6%, led by double-digit growth in traditional equipment.
- U.S. medical distribution sales growth of 4.9%, with strong performance in home solutions, partially offset by lower demand in respiratory categories.
- International dental merchandise sales up 9.2% (or 3.8% in constant currency), and international dental equipment up 13.9% (or 7.5% in constant currency).
- Global value-added services sales up 9.6% (or 8.5% in constant currency), driven by international business solutions.
Bergman said global dental equipment sales reached a record, with U.S. dental equipment delivering double-digit growth. He noted traditional equipment drove much of the growth and referenced some supplier-sponsored promotions, while also emphasizing that demand remained supported by dentists’ willingness to invest for productivity and technology upgrades. Digital equipment sales increased in the low single digits, with unit growth across imaging, mills, 3D printers, and intraoral scanners, though average selling prices for intraoral scanners continued to decline modestly due to lower-priced new entrants.
In global specialty products, South reported sales growth of 14.6% (or 11.1% constant currency). He said implants and biomaterials grew solidly, including double-digit growth in value implants and mid-single-digit growth in premium implants, and noted the mix shift pressured gross margin percentage versus the prior year. Management attributed strength to BioHorizons Camlog in Germany, S.I.N. in Brazil, and Biotech Dental in France, each delivering double-digit growth. The company also introduced the S.I.N. value implant system in the U.S. during the quarter and said it expects that launch to contribute to U.S. growth in 2026.
For global technology, South said sales grew 8.4% (or 7.6% constant currency), driven in the U.S. by practice management software and double-digit growth in Dentrix Ascend, and internationally by Dentally. Bergman said cloud-based customers increased by more than 20% year over year and that Dentrix Ascend surpassed 11,000 subscribers. He also outlined product and workflow enhancements and highlighted an Amazon Web Services partnership supporting generative and agentic AI integration, including tools such as Voice Notes and an AI-powered image quality assessment feature called Image Verify.
Restructuring, value creation initiatives, and capital return
South said the company recorded $23 million of restructuring expense in the quarter (about $0.12 per diluted share), related to a restructuring program announced in August 2024. Full-year restructuring expense totaled about $105 million (about $0.59 per diluted share).
On value creation initiatives, South reiterated an expectation for over $200 million of operating income improvement over the next few years through cost savings and incremental gross margin opportunities, including pricing, accelerating corporate brand sales, lowering cost to serve, and centralizing support services. He said the company expects an annual run-rate operating income improvement of over $125 million by the end of 2026, with earnings growth “more heavily weighted” to the second half of 2026 as implementation progresses.
Henry Schein repurchased 2.8 million shares in the quarter for $200 million at an average price of $71.10 per share, and ended the year with about $780 million remaining under its authorization. South said 2026 guidance assumes a relatively stable share count, with repurchases evaluated as the year progresses.
The company generated $381 million in operating cash flow in the quarter, up from $204 million a year earlier, which South attributed to working capital management.
2026 outlook: sales growth and EPS guidance
South said the company is not providing GAAP guidance due to the difficulty of estimating restructuring costs tied to ongoing value creation initiatives. For 2026, Henry Schein guided to sales growth of 3% to 5% and non-GAAP diluted EPS of $5.23 to $5.37, representing 5% to 8% growth versus 2025 non-GAAP diluted EPS of $4.97. Guidance assumes stable dental and medical end markets, foreign exchange rates generally consistent with current levels, and that tariff effects can be mitigated.
South added that guidance assumes lower remeasurement gains in 2026 than in 2025, though he noted the outcome depends on potential transactions involving minority investments. The company expects an estimated non-GAAP effective tax rate of approximately 24% and forecast mid-single-digit adjusted EBITDA growth versus 2025 adjusted EBITDA of $1.1 billion.
About Henry Schein (NASDAQ:HSIC)
Henry Schein, Inc is a leading global distributor of healthcare products and services, primarily serving office-based dental, medical and animal health practitioners. The company operates through three principal segments—Schein Dental, Schein Medical and Animal Health—each offering a comprehensive portfolio of consumable products, equipment, instruments and related value-added services. With a focus on improving practice efficiency and patient care, Henry Schein provides everything from dental restorative materials and orthodontic appliances to vaccines, pharmaceuticals and diagnostic devices for physicians, as well as pet health products and veterinary equipment for animal health professionals.
In addition to its broad product offering, Henry Schein delivers a suite of technology and service solutions aimed at streamlining workflows and enhancing clinical outcomes.
