Charles River Laboratories International 2025 Q2 Earnings Beats Expectations as Net Income Drops 44.1%

Charles River Laboratories International reported fiscal 2025 Q2 earnings on August 6, 2025, with results exceeding expectations driven by stronger-than-anticipated DSA performance and favorable FX. The company raised 2025 guidance, despite reporting a decline in net income and EPS.

Revenue
The total revenue for Charles River Laboratories International reached $1.03 billion in Q2 2025, reflecting a 0.6% year-over-year increase compared to $1.03 billion in the same period of 2024.

Earnings/Net Income
The company’s net income declined significantly to $52.69 million in Q2 2025, representing a 44.1% drop from $94.26 million in Q2 2024. Similarly, EPS fell 39.4% to $1.06 from $1.75 in the prior-year period, indicating a disappointing earnings performance.

Price Action
Shares of Charles River Laboratories International fell 4.36% during the latest trading day and 14.68% over the previous full trading week, with a 2.32% decline month-to-date.

Post Earnings Price Action Review
A strategy of buying CRL shares following the revenue growth quarter-over-quarter and holding for 30 days underperformed significantly, yielding a CAGR of -12.85% and an excess return of -81.44%. This strategy lagged far behind the benchmark return of 48.58%, with a high maximum drawdown and a negative Sharpe ratio of -0.29, indicating a high-risk profile with poor returns.

CEO Commentary
CEO James C. Foster attributed the stronger-than-expected Q2 results to robust DSA performance and favorable foreign exchange impacts. He highlighted stabilization in biopharma demand, despite a net book-to-bill of 0.82x. While expressing cautious optimism about long-term prospects, he acknowledged ongoing uncertainties such as NIH funding and drug pricing pressures. Strategic investments in Non-Animal Methods and staffing were outlined to support demand, with confidence in CRL’s scientific leadership and shareholder value over the long term.

Guidance
Charles River Laboratories International raised its 2025 guidance, forecasting a 1% to 3% organic revenue decline. Non-GAAP EPS is expected to range between $9.90 and $10.30, with DSA revenue declining at a low to mid-single-digit rate. RMS and Manufacturing revenue are anticipated to remain flat to slightly positive, with operating margin expected to be flat to down 30 basis points for the year. The company also expects a $0.14 EPS benefit from FX and a $0.55 EPS guidance increase, with free cash flow guidance raised to $430 million to $470 million, supported by operational improvements and tax savings from new legislation.

Additional News
On August 6, 2025, Charles River Labs released its Q2 2025 report, which highlighted performance above expectations, driven by strong DSA results and favorable FX. While the report noted improving bookings in the biopharma sector, it also acknowledged ongoing uncertainties related to NIH funding and drug pricing. No major M&A activity or C-level executive changes were disclosed within three weeks of the report. Additionally, no dividend or share buyback announcements were made during this period.