HSIC Surpasses Q2 Earnings and Revenue Estimates, Stock Climbs

Following the announcement, HSIC’s shares edged up 0.1% in the pre-market session today.

Henry Schein’s Distribution Business Gains

Global Distribution and Value-Added Services sales increased 6.6% to $2.91 billion. The segment generated 4.5% internal growth, a 0.6% contribution from acquisitions and a 1.5% foreign exchange benefit.

Global Medical Distribution sales advanced 4% to $1.06 billion, supported by 3.9% internal growth. Global Value-Added Services sales increased 5.1% to $61 million, reflecting 3.7% internal growth.

U.S. Distribution and Value-Added Services sales rose 4.6% to $1.95 billion. International sales in the segment climbed 10.7% to $965 million, aided by 5.5% internal growth and a 4.5% currency benefit.

HSIC’s Specialty and Technology Sales Rise

Global Specialty Products sales increased 8.7% to $419 million. Internal growth was 3.2%, acquisitions contributed 3.4% and foreign currency exchange added 2.1%.

Global Technology sales advanced 8.2% to $181 million. Internal sales grew 9.1%, partly offset by a 1.3% reduction related to a business disposal. Foreign exchange contributed 0.4%.

Technology delivered the company’s highest internal growth rate among its major reporting categories. The performance complemented steady gains in dental merchandise, medical distribution and specialty products.

HSIC’s Margin Performance

In the reported quarter, gross profit totaled $1.10 billion, representing an 8.4% increase year over year. The gross margin expanded 48 basis points (bps) to 31.8% despite a 6% rise in the cost of sales.

Selling, general and administrative expenses increased 6.8% to $831 million. Operating income rose 13.2% to $171 million, while the operating margin expanded 28 bps year over year to 4.9%.

Liquidity Position of HSIC

Henry Schein exited the second quarter of 2026 with cash and cash equivalents of $157 million compared with $138 million at March-end.

Cumulative net cash provided by operating activities at the end of the reported quarter was $145 million compared with $157 million a year ago.

Henry Schein Raises Its 2026 Outlook

Management raised its 2026 adjusted earnings guidance to $5.29-$5.39 per share, from the earlier $5.23-$5.37 range. The Zacks Consensus Estimate for earnings currently stands at $5.32 per share.

The company also lifted its total sales growth forecast to 4.5%-5.5% from 3%-5%. The Zacks Consensus Estimate for sales is currently pegged at $13.72 billion, indicating 4.1% year-over-year growth.

Adjusted EBITDA is now expected to grow at a mid- to high-single-digit rate, compared with the prior expectation of mid-single-digit growth. Management cited sustained business momentum, margin improvement and early benefits from its value creation initiatives.

The updated outlook assumes foreign exchange rates remain generally consistent with current levels. It excludes future tariff refunds, remeasurement gains and several items that management does not consider representative of underlying performance.

Our Take

Henry Schein exited the second quarter with both earnings and revenue beating estimates. Performance was driven by sustained momentum across the company’s businesses and solid operational execution by the team. Henry Schein also benefited from the early impact of its value creation initiatives, which supported stronger adjusted bottom-line growth. The raised guidance for the year is also very promising.

HSIC’s Zacks Rank and Key Picks

Henry Schein currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Labcorp Holdings LH, Quest Diagnostics DGX and Medpace MEDP.

Labcorp, carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $4.99, which surpassed the Zacks Consensus Estimate by 4.18%. Revenues of $3.73 billion beat the Zacks Consensus Estimate by 0.36%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LH has an earnings yield of 5.9% compared with the industry’s 4.1% yield. The company's earnings beat estimates in each of the trailing four quarters, the average surprise being 3.09%.

Quest Diagnostics, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $3.12, exceeding the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion topped the Zacks Consensus Estimate by 2.1%.

DGX has an earnings yield of 4.7%, almost in line with the industry’s yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 5.77%.

Medpace, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 4.17%. Revenues of $707.3 million outperformed the consensus mark by 1.12%.

MEDP has an historical five-year earnings growth rate of 30.5% compared with the industry’s 5.6% growth. In the trailing four quarters, the company delivered an average earnings beat of 10.16%.

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