Henry Schein Lowers 2022 Sales Growth Outlook; Announces Restructuring Plan

While reporting second-quarter results on Tuesday, Henry Schein, Inc. (HSIC) affirmed full-year 2022 GAAP EPS guidance range of $4.75 to $4.91, reflecting growth of 7% to 10% over full-year 2021 GAAP EPS and growth of 5% to 9% over full-year 2021 non-GAAP EPS. The company updated full-year 2022 expected sales growth to be approximately 3% to 6% over 2021. This is compared with previous guidance for growth of 5% to 8% over 2021 and reflects adverse effects from foreign exchange rates and a decrease in anticipated sales of PPE and COVID-related products, including COVID-19 test kits. Sales of COVID-19 test kits are now expected to decline 25% to 30% from 2021, versus a previously estimated decline of 15% to 25%.

Henry Schein also announced a company-wide restructuring plan that is focused on funding the priorities of the strategic plan and streamlining operations and other initiatives to increase efficiency. The company expects to record restructuring charges in 2022 and 2023. The expense savings realized from the plan are expected to mainly affect 2023 and beyond.

Second-quarter bottom line came in at $160 million, or $1.16 per share compared with $156 million, or $1.10 per share, prior year. Excluding items, Henry Schein reported adjusted earnings of $160 million or $1.16 per share for the period. Analysts on average had expected the company to earn $1.16 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Second-quarter net sales were $3.0 billion, up 2.1% from last year. Internal sales were up 6.7% in local currencies when excluding sales of PPE and other COVID-19 related products.

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