10-Q · August 4, 2026
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…
Earnings analysis · 10-Q
HSIC earnings analysis
Filed November 3, 2026 · Our reading of the company's report
The latest report
Henry Schein delivered solid third-quarter operating performance, with revenue up 4.0%, gross margin expanding 110 basis points to 31.8%, and diluted EPS rising 26% to $1.06. Growth was broad-based across Global…
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Henry Schein delivered solid third-quarter operating performance, with revenue up 4.0%, gross margin expanding 110 basis points to 31.8%, and diluted EPS rising 26% to $1.06. Growth was broad-based across Global Distribution and Value-Added Services, Global Specialty Products and Global Technology, although value-added services declined 4.8%. The results benefited from $28 million of tariff refunds, while higher debt, weaker working-capital efficiency and lower operating cash flow remain key concerns. No material changes to the 2025 Form 10-K risk factors were disclosed.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.06
- Gross margin
- 31.8%
What stood out
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Sales increased 4.0% year over year
Third-quarter net sales were $3,471 million, up 4.0% from $3,339 million in the prior-year quarter. Global sales growth comprised 3.1% internal growth, 0.7% acquisition growth and 0.2% foreign-exchange growth.
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Gross margin expanded 110 basis points
Gross profit rose 7.7% to $1,105 million from $1,026 million, while gross margin expanded to 31.8% from 30.7%, a 110-basis-point improvement. Management cited favorable mix, value-creation initiatives and $28 million of tariff-refund benefits.
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Diluted EPS rose 26%
Diluted EPS increased to $1.06 from $0.84 in the prior-year quarter, an increase of $0.22, or approximately 26%.
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Specialty and technology segments grew
Global Specialty Products sales increased 6.1%, supported by value and premium implant businesses, while Global Technology sales increased 5.2% on higher adoption of cloud-based practice-management platforms and revenue-cycle-management solutions.
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Acquisition spending and cash investment declined
Nine-month operating cash flow was $306 million versus $331 million in the prior year. Capital spending was $85 million and capitalized software costs were $45 million, while investing cash use declined to $173 million from $253 million due primarily to lower acquisition activity.
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Credit capacity and maturity extended
The company amended its revolving credit agreement on September 21, 2026, increasing commitments from $1.0 billion to $1.25 billion and extending maturity to September 19, 2031.
What to watch
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Working capital pressured cash flow
Nine-month operating cash flow declined by $25 million to $306 million from $331 million, primarily due to working-capital changes. Accounts receivable increased by $238 million and inventories increased by $41 million in the cash-flow reconciliation.
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Higher debt increased interest burden
Total debt increased to $3,524 million from $3,107 million at December 27, 2025, while interest expense increased to $42 million from $38 million in the quarter and to $124 million from $111 million for nine months.
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Tariff refunds boosted reported results
The quarter included a $28 million net benefit from previously paid IEEPA tariffs, including $20 million in Global Distribution and Value-Added Services and $8 million in Global Specialty Products. Management expects additional tariff-refund benefits in Q4 2026, creating a non-recurring support to margins and earnings.
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Receivables and inventory efficiency weakened
Accounts-receivable days sales outstanding increased to 46.6 days from 45.3 days, while inventory turns decreased to 4.6 from 4.8, indicating weaker working-capital efficiency.
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Higher effective tax rate
The effective tax rate increased to 23.1% from 21.3% in the quarter and to 24.5% from 23.5% for the first nine months, creating a headwind to earnings growth.
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Restructuring costs remain ongoing
The company recorded $22 million of restructuring and related charges in the quarter and $63 million year to date, and expects the restructuring plan to continue through the end of 2027.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. Management expects additional tariff-refund benefits in the fourth quarter of 2026 and expects restructuring charges to continue through the end of 2027; the estimated 2026-2027 restructuring amount has not been determined.
Earlier filings 2
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…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.