PPE and other COVID-19 products drive Henry Schein sales growth
Henry Schein Inc. in Melville said its sales growth in the third quarter was driven by sales of PPE and COVID-19-related products. Credit: Barry Sloan
Henry Schein Inc., Long Island's largest public company based on revenue, Monday posted a 13.2% sales increase for the third quarter driven by demand for personal protective equipment and other products related to COVID-19.
The Melville-based distributor of dental and medical products, citing "uncertainty surrounding the COVID-19 pandemic," declined to provide financial guidance for upcoming quarters and shares fell 2.1% to close Monday at $62.22.
Net sales for the quarter ended Sept. 26, were $2.8 billion. Net income was $141.7 million, or 99 cents per diluted share, compared with $134.9 million or 91 cents per diluted share, in the year-earlier period.
Stanley M. Bergman, chairman and chief executive of Henry Schein, said in a statement that the global outbreak of COVID-19 obstructed some operations.
"The pandemic caused disruption to the supply chain and as suppliers reacted to increased demand for personal protective equipment and shortages of raw materials our markets experienced significant price volatility," he said. "The strong rebound in sales that began late in the second quarter continued into the third quarter, with growth over the prior year driven by sales of PPE and COVID-19-related products."
Third quarter sales in the dental market, Henry Schein's largest business, increased 6.7% to $1.6 billion, while medical sales grew 27.8%, reaching a record $1 billion.
In a research note, analyst Jeff Johnson of Robert W. Baird & Co. Inc., said he expects that surge in PPE sales will fade and the pandemic will inject uncertainty into the dental distribution business in the coming quarters.
Bergman said that COVID-19 tests, initially allocated to the federal government for distribution, are increasingly becoming available to commercial enterprises.
The company's software unit posted sales of $138.4 million, a 0.7% increase from the prior year's quarter.
The quarterly results exclude results from Henry Schein's former veterinary business, which was spun off in February 2019 into a publicly traded company, Covetrus.
Henry Schein, a Fortune 500 company, has 19,000 employees and operations or affiliates in 31 countries.
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Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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