Dental and medical products company Henry Schein (NASDAQ: HSIC) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.7% year on year to $3.44 billion. Its GAAP profit of $0.85 per share was 16.4% below analysts’ consensus estimates.

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“Our fourth-quarter sales reflect continuing momentum resulting in the highest sales growth in 15 quarters. We are pleased with the sales results across all our businesses, particularly our global equipment, specialty products and technology businesses. This drove our strong fourth-quarter earnings which exceeded the increased 2025 financial guidance we provided in our third quarter earnings release,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein.

Company Overview

With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ: HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Henry Schein’s 5.4% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the healthcare sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Henry Schein’s recent performance shows its demand has slowed as its annualized revenue growth of 3.4% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

Henry Schein also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Henry Schein’s organic revenue averaged 1.3% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Henry Schein reported year-on-year revenue growth of 7.7%, and its $3.44 billion of revenue exceeded Wall Street’s estimates by 2.8%.

Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its newer products and services will not accelerate its top-line performance yet.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Henry Schein was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.5% was weak for a healthcare business.

Looking at the trend in its profitability, Henry Schein’s operating margin decreased by 1.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Henry Schein’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Henry Schein generated an operating margin profit margin of 4.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Henry Schein’s EPS grew at an unimpressive 3.1% compounded annual growth rate over the last five years, lower than its 5.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of Henry Schein’s earnings can give us a better understanding of its performance. As we mentioned earlier, Henry Schein’s operating margin was flat this quarter but declined by 1.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Henry Schein reported EPS of $0.85, up from $0.75 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Henry Schein’s full-year EPS of $3.27 to grow 31.9%.

Key Takeaways from Henry Schein’s Q4 Results

We enjoyed seeing Henry Schein beat analysts’ revenue expectations this quarter. We were also glad its organic revenue outperformed Wall Street’s estimates. On the other hand, its EPS missed. Zooming out, we think this was a mixed quarter. The stock traded up 1.2% to $81.55 immediately following the results.

So do we think Henry Schein is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).