Henry Schein Navigates Currency Headwinds with Strategic Growth Initiatives in Q1 2025

Henry Schein, Inc. (NASDAQ: HSIC) kicked off 2025 with a mix of resilience and strategic ambition, reporting first-quarter financial results that underscore its ability to grow amid macroeconomic challenges. While currency pressures and lingering post-pandemic adjustments impacted top-line figures, the dental and medical supply giant demonstrated operational discipline and progress toward its long-term growth targets.

Revenue and Earnings: Resilience Amid Headwinds

The quarter’s highlights began with a 22% jump in GAAP diluted EPS to $0.88, driven by cost-cutting and margin improvements. Non-GAAP EPS rose 4.5% to $1.15, reflecting steady profitability excluding one-time expenses. Total net sales reached $3.2 billion, but as-reported sales dipped 0.1% due to a stronger U.S. dollar, which erased 1.6% of constant currency growth. Excluding pandemic-related products like PPE and test kits, sales grew 2.0% in constant currency—a sign of underlying demand stability.

Segment Breakdown: Technology and Specialty Products Lead the Way

The company’s three business segments revealed divergent trends:
- Global Distribution & Value-Added Services: Sales grew modestly (+0.8% constant currency), though dental equipment sales fell 2.4% as prior-year sales deferrals weighed. Medical Distribution, however, surged 3.0% on stronger patient traffic and home healthcare demand.
- Global Specialty Products: Delivered the strongest growth, up 4.3% in constant currency, fueled by implant and biomaterial sales. Acquisitions also contributed to this segment’s momentum.
- Global Technology: Sales rose 3.4%, with cloud-based practice management systems like Dentrix Ascend driving gains. Legacy system declines were offset by subscription-based software adoption.

Restructuring and Buybacks: Balancing Costs and Returns

The quarter saw $25 million in restructuring costs as part of a broader initiative to save $75–$100 million annually by year-end. Meanwhile, Henry Schein returned capital to shareholders aggressively, repurchasing $161 million in shares (≈2.3 million) and retaining $718 million under its buyback authorization. This prioritization of shareholder value aligns with its focus on operational efficiency.

Strategic Focus: BOLD+1 and the Path to Growth

CEO Stanley M. Bergman emphasized progress on the BOLD+1 Strategic Plan (2025–2027), which targets high-single-digit to low-double-digit earnings growth through three pillars:
1. Operational Excellence: Streamlining distribution operations and enhancing customer experience.
2. Specialty Expansion: Scaling dental and medical specialty businesses, including implant technologies and corporate brand products.
3. Digital Dominance: Investing in cloud-based solutions to reduce reliance on legacy systems.

The company’s full-year 2025 guidance reinforces this vision. Non-GAAP EPS is projected to rise 1–4% to $4.80–$4.94, while sales growth of 2–4% and mid-single-digit Adjusted EBITDA expansion reflect cautious optimism.

Risks and Considerations

Henry Schein faces headwinds beyond its control. The strong U.S. dollar continues to pressure reported sales, and macroeconomic uncertainties—such as supply chain disruptions and regulatory changes—were flagged as risks. A lingering shadow from the October 2023 cyberattack also underscores the need for robust IT investments.

Conclusion: A Steady Hand in a Volatile Landscape

Henry Schein’s Q1 results paint a company navigating choppy waters with deliberate steps. While currency headwinds and sector-specific challenges remain, its focus on high-margin specialty products, cloud-based technologies, and cost discipline positions it to outperform in the medium term.

The 4.5% rise in non-GAAP EPS and 4.3% growth in Specialty Products sales highlight execution strength, while the $718 million remaining buyback capacity signals confidence in its balance sheet (cash: $127 million, total assets: $10.5 billion). With the BOLD+1 plan targeting long-term earnings growth, investors can reasonably anticipate steady progress—if management can sustain momentum against external pressures.

For now, Henry Schein’s mix of strategic discipline and innovation suggests it is well-equipped to weather current storms—and perhaps even capitalize on them.