Henry Schein NASDAQ: HSIC executives said the company is on track with its 2026 commitments and value-creation plan, while pointing to continued momentum in the U.S. dental market despite broader concerns about consumer confidence.
Speaking at a Stifel dental track event moderated by Stifel Managing Director Jon Block, Fred Lowery, who became Henry Schein’s chief executive officer in March, said his first roughly 100 days have been focused on “listening and learning” and organizing priorities into three areas: delivering on commitments, simplifying the business and scaling for growth.
Lowery said Henry Schein remains on track to deliver on its 2026 guidance and previously outlined value-creation initiatives. He also said the company has opportunities to simplify a decentralized business structure, including joint ventures and aspects of its commercial approach, while building on its technology, own-brand and distribution capabilities.
Dental Demand Remains Steady
Lowery said the dental market has remained relatively steady because a large portion of dental demand is tied less to consumer sentiment and more to employment and insurance coverage.
He described two major groups of patients: those who visit the dentist every six months, often with employer-provided insurance, and those who delay treatment until pain, discomfort or visible issues require care. Lowery said a smaller portion of the market is more discretionary, including cosmetic procedures.
“As long as people are working at a reasonable rate, and unemployment rates have been pretty steady, I think that bodes well for the market overall,” Lowery said.
Ron South, Henry Schein’s senior vice president and chief financial officer, said the company saw dental momentum improve through the first quarter, with February better than January and March better than February. He said that momentum continued into April and through the first part of May.
South said Henry Schein has not yet seen a direct correlation between recent weaker consumer confidence measures and its dental business. He attributed the company’s improvement in dental to momentum that began in the third quarter of last year, including promotional activity in mid-2025 that helped the company gain market share in the second half of that year.
South said Henry Schein has moved “a little more on offense” and is seeing benefits from hiring experienced sales representatives and emphasizing its role as a solutions provider rather than only a product provider.
Medical and International Trends
Lowery said Henry Schein’s medical business faced pressure in the first quarter from diagnostic test kits tied to respiratory illness, primarily flu. Excluding that headwind, he said the underlying medical business grew at a mid-single-digit rate, and that trend has continued into the second quarter.
Lowery also highlighted strong growth in the company’s home solutions business.
On international markets, South said Germany has remained a steady market for Henry Schein in core dental and specialty. He also cited Canada as a strong business that has managed competitive challenges well.
Revenue Growth and New Products
South said first-quarter overall revenue growth benefited by about three points from foreign exchange, a benefit he expects to diminish as the year progresses. He said the company expects to improve its internal growth rate after first-quarter headwinds from point-of-care diagnostic kits in medical and timing in the specialty business.
Lowery said Henry Schein continues to expect suppliers to invest in new products and views its distribution network as an attractive launch platform. He pointed to Curodont, which he said is being launched exclusively through Henry Schein’s distribution network, as an important product in the company’s portfolio.
Lowery also said Henry Schein is accelerating new capabilities in its technology business, including through internal artificial intelligence development and partnerships that can plug into its clinical workflow and practice management systems. He said investors should expect a “steady drumbeat” of new products and capabilities in technology, along with continued product launches in specialty products.
In implants, Lowery said Henry Schein became the majority owner of the S.I.N. U.S. distribution business in the first quarter. He described S.I.N. as a value implant business operating in a part of the U.S. market where growth is strong.
Value-Creation Plan
Lowery said Henry Schein’s value-creation plan is broader than cost reduction and includes gross profit improvement and operating efficiency. He said the company is investing in analytics, tools and personnel to improve pricing visibility and make more targeted decisions on where to raise or lower prices.
He said Henry Schein is also focused on expanding its own brands and building shared-service capabilities for back-office functions with an outsourced partner. Lowery added that the company is developing systems, processes and personnel to better leverage its scale in indirect sourcing.
Lowery said the company has line of sight to a $125 million net run-rate operating income improvement by the end of 2026 and expects to deliver up to $200 million over the next few years.
South said the $125 million run-rate target supports the possibility of double-digit earnings growth in 2027, though he said it is too early to provide 2027 guidance.
Portfolio, Equipment and Capital Allocation
Lowery said Henry Schein is comfortable with the current perimeter of its business, including the medical segment. He said the medical and dental businesses are integrated from a supply chain standpoint, with about 30% of SKUs overlapping between the two.
On dental equipment, South said Henry Schein’s U.S. equipment mix remains roughly two-thirds traditional equipment and one-third digital equipment. He said lower average selling prices for intraoral scanners may encourage more dental practices to adopt digital technology, potentially creating future opportunities for additional digital equipment sales.
Lowery said Henry Schein remains committed to a balanced and disciplined capital allocation strategy. He said share repurchases have been prioritized recently and are likely to remain a priority in the near term because he believes the stock is undervalued.
Lowery said the company also wants to maintain flexibility for strategic investments and would approach mergers and acquisitions in a disciplined way, focusing on assets that support customers, drive future organic growth, expand margins and generate appropriate shareholder returns.
About Henry Schein NASDAQ: HSIC
Henry Schein, Inc is a leading global distributor of healthcare products and services, primarily serving office-based dental, medical and animal health practitioners. The company operates through three principal segments—Schein Dental, Schein Medical and Animal Health—each offering a comprehensive portfolio of consumable products, equipment, instruments and related value-added services. With a focus on improving practice efficiency and patient care, Henry Schein provides everything from dental restorative materials and orthodontic appliances to vaccines, pharmaceuticals and diagnostic devices for physicians, as well as pet health products and veterinary equipment for animal health professionals.
In addition to its broad product offering, Henry Schein delivers a suite of technology and service solutions aimed at streamlining workflows and enhancing clinical outcomes.
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