10-Q · May 5, 2026
Henry Schein, Inc. reported Q1 2026 net sales of $3.368 billion, showing a 6.3% increase year-over-year, and achieved a non-GAAP diluted EPS of $1.32, up from $1.15 in the prior year. The cash flow from operations was…
Earnings analysis · 10-Q
HSIC earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Henry Schein delivered Q2 net sales of $3.458 billion, up 6.7% year over year and $218 million above the prior-year quarter, while gross margin improved to 31.8% from 31.4%. Growth was broad based across Distribution…
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Henry Schein delivered Q2 net sales of $3.458 billion, up 6.7% year over year and $218 million above the prior-year quarter, while gross margin improved to 31.8% from 31.4%. Growth was broad based across Distribution and Value-Added Services (+6.6%), Specialty Products (+8.7%), and Technology (+8.2%), with favorable mix and value-creation initiatives supporting gross-profit expansion. Offsetting factors include a $355 million increase in total debt to $3.462 billion, higher interest expense, and softer six-month operating cash flow of $145 million versus $157 million.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Gross margin
- 31.8%
What stood out
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Revenue grew 6.7% to $3.458 billion
Q2 net sales increased $218 million, or 6.7%, to $3.458 billion from $3.240 billion in the prior-year quarter. Growth comprised 4.6% local internal growth, 0.7% acquisition growth and a 1.4% favorable foreign-exchange impact.
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Gross margin expanded 40 basis points
Gross profit increased $85 million, or 8.3%, to $1.101 billion, and consolidated gross margin expanded 40 basis points to 31.8% from 31.4%. Management attributed the improvement to favorable mix and early benefits from value-creation initiatives.
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Broad-based segment growth
All three operating segments expanded: Distribution and Value-Added Services grew 6.6%, Specialty Products grew 8.7%, and Technology grew 8.2%. Technology's 9.1% internal local-currency growth reflected higher adoption of core practice-management and cloud platforms.
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Dental and medical sales increased
Distribution dental sales rose 8.1% to $1.854 billion, driven by U.S. and international merchandise and equipment growth. Medical sales rose 4.0% to $1.057 billion, supported by government and Home Solutions businesses.
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Acquisition cash use declined; buyback capacity
Six-month investing cash outflow decreased $69 million to $128 million from $197 million, which management attributed primarily to lower acquisition activity. The company also retained $455 million of share-repurchase authorization at June 27, 2026.
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Restructuring program targets 2027 completion
Management expects the 2024 restructuring plan to be completed by the end of 2027. The plan is intended to integrate acquisitions, right-size operations and improve efficiency.
What to watch
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Debt and interest expense increased
Total debt increased to $3.462 billion at June 27, 2026 from $3.107 billion at December 27, 2025. Q2 interest expense increased $5 million to $43 million, primarily due to increased borrowings.
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Working-capital efficiency weakened
Six-month operating cash flow fell $12 million to $145 million from $157 million, principally due to working-capital movements. Receivable DSO rose to 45.7 days from 44.7 days and inventory turns declined to 4.6 from 4.7.
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Restructuring charges continue through 2027
Q2 restructuring and related charges were $29 million, up from $23 million in the prior-year quarter; six-month charges were $41 million. Management expects charges to continue through the end of 2027, but has not determined the 2026-2027 amount.
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Lower respiratory-test demand offsets medical growth
Medical internal local-currency growth was 3.9%, but lower point-of-care diagnostic-test product sales related to respiratory illness partly offset growth in government and Home Solutions businesses.
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No formal risk-factor changes; tariff uncertainty
Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. Nonetheless, management notes that U.S. tariff scope and applicability remain uncertain; tariff refunds received during the six months ended June 27, 2026 were described as immaterial.
Management's outlook
The 10-Q does not provide quantitative EPS or revenue guidance. Management states that it expects to recognize the net impact of additional tariff refunds received after June 27, 2026 in the quarter ending September 26, 2026; the amount was not disclosed.
Earlier filings 1
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