Henry Schein — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total net sales for the quarter were $3.5 billion, a 4.0% increase compared to the third quarter of 2025, driven by 3.1% internal growth, 0.7% from acquisitions, and 0.2% from foreign currency exchange.
• GAAP diluted earnings per share (EPS) were $1.06, up 26.2% year-over-year; GAAP net income was $119 million.
• Non-GAAP diluted EPS were $1.56, up 13.0% year-over-year; non-GAAP net income was $175 million.
• Excluding net tariff refunds ($0.19 per share) and prior-year remeasurement gains ($0.23 per share), non-GAAP diluted EPS increased 19.1% to $1.37.
• Adjusted EBITDA was $321 million, up from $295 million in the prior year, with the margin expanding 40 basis points to 9.24%.
• Year-to-date total net sales were $10.3 billion, a 5.6% increase compared to the first nine months of 2025.
• Year-to-date GAAP diluted EPS were $2.80, up 15.7%; non-GAAP diluted EPS were $4.14, up 14.0%.
• Year-to-date Adjusted EBITDA was $898 million, up from $810 million, with the margin growing 41 basis points to 8.72%.
• Cash and cash equivalents were $184 million as of September 26, 2026.
• Total debt (current maturities and long-term) was $2.52 billion ($142 million current, $2.38 billion long-term).
• Inventories were $2.05 billion, up from $2.00 billion at the end of 2025.

Guidance and Future Outlook:

• Raised FY2026 non-GAAP diluted EPS guidance to $5.50 to $5.56, previously $5.29 to $5.39.
• Raised FY2026 Adjusted EBITDA growth guidance to high-single-digits, previously mid to high-single-digits.
• Maintained FY2026 total sales growth guidance at 4.5% to 5.5%.
• The updated guidance assumes no significant tariff refunds or remeasurement gains for the remainder of 2026.
• Guidance includes targeted, limited growth investments in the fourth quarter expected to contribute to 2027 growth.
• Guidance assumes foreign currency exchange rates remain generally consistent with current levels.
• Management does not provide a reconciliation of non-GAAP guidance to GAAP due to the uncertainty of predicting restructuring expenses and related costs.

Business Segments and Product Lines:

• Global Distribution and Value-Added Services sales increased 3.7% total, with 2.9% internal growth.
• Global Dental Distribution merchandise sales grew 7.0% total (5.1% internal), driven primarily by volume from market share gains.
• Global Dental Distribution equipment sales increased 2.3% total (2.4% internal).
• Global Medical Distribution sales increased 1.1% total (1.0% internal).
• Global Value-Added Services sales decreased 4.8% on both reported and internal bases.
• Global Specialty Products sales increased 6.1% total (3.4% internal, 2.6% from acquisitions).
• Global Technology sales increased 5.2% total (6.5% internal), offset by a 1.3% decrease due to a business disposal.
• U.S. dental merchandise sales grew 8.6% in the third quarter.

Market and Competitive Landscape:

• U.S. dental merchandise sales growth was driven by volume in a stable market and market share gains.
• The company operates in a highly competitive and consolidating market, including competition from third-party online commerce sites.
• Henry Schein serves more than 1 million customers globally with over 300 valued solutions.

Risks and Challenges:

• Risks include dependence on third parties for manufacturing, supply, and raw materials.
• Potential impacts from the Strategic Partnership Agreement with KKR Hawaii Aggregator L.P. entered in January 2025.
• Risks related to transitions in senior company leadership.
• Challenges associated with acquisitions, joint ventures, and the failure to achieve anticipated synergies.
• Security risks including cyberattacks and data security breaches.
• Exposure to political, economic, and regulatory influences, including the EU Medical Device Regulation and healthcare fraud laws.
• Risks from geopolitical conflicts, trade wars, tariffs, and supply chain disruptions.
• Potential impacts from disease outbreaks, pandemics, and natural disasters.

Management Commentary and Tone:

• Fred Lowery, Chief Executive Officer, stated the company delivered another strong quarter, increasing confidence in the building momentum.
• Management expressed pleasure with the 8.6% U.S. dental merchandise sales growth and 19% adjusted earnings per share growth.
• CEO noted the strategy is translating into stronger financial results through share gains, portfolio mix improvements, disciplined capital allocation, and value creation initiatives.
• Management believes non-GAAP measures provide useful supplemental information regarding underlying business performance.

Other Key Points:

• The company repurchased approximately 1.4 million shares in the third quarter for $125 million at an average price of $86.67 per share.
• Year-to-date share repurchases totaled approximately 5.7 million shares for $450 million at an average price of $79.50 per share.
• Approximately $330 million in authorization remained available for future stock repurchases at the end of the quarter.
• The company recognized a $0.19 per share net benefit from tariff refunds in Q3 2026 and a $0.23 per share remeasurement gain in Q3 2025.
• The company operates through a centralized and automated distribution network with over 300,000 branded products.
• Henry Schein is a Fortune 500 Company and a member of the S&P 500 index.