HSIC · Q2 2026 Earnings

Bullish

Henry Schein

Reported August 4, 2026

30-second summary

Henry Schein reported Q2 FY2026 revenue of $3.46B (+6.7% YoY, +2.6% above consensus) and non-GAAP EPS of $1.27 (+2.4% above the $1.24 estimate), then raised FY2026 guidance across all three disclosed metrics: EPS midpoint from $5.30 to $5.34, total sales growth from 3–5% to 4.5–5.5%, and Adjusted EBITDA growth from "mid-single digits" to "mid to high-single digits." The last item is the quiet upgrade that matters — after four consecutive quarters of unchanged EBITDA growth language, management finally moved the range upward, breaking the pattern where EPS raises leaned on buybacks and tax rather than operating leverage.

Headline numbers

EPS

Q2 FY2026

$1.27

+2.4% vs est.

Revenue

Q2 FY2026

$3.46B

+6.7% YoY

+2.6% vs est.

Gross margin

Q2 FY2026

31.8%

Free cash flow

Q2 FY2026

$0.21B

Operating margin

Q2 FY2026

4.9%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$3.46B	$3.24B	+6.7%	$3.37B	+2.7%
EPS	$1.27	$1.10	+15.5%	$1.32	-3.8%
Gross margin	31.8%	31.4%	+40bps	31.8%	+0bps
Operating margin	4.9%	4.7%	+20bps	5.4%	-50bps
Free cash flow	$0.21B	—	—	—	—

Guidance

Henry Schein raised FY2026 guidance across EPS and revenue growth on sustained momentum, with Q2 results beating both consensus revenue and earnings estimates.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY 2026	—	$3.458 billion	+$0.088 billion above estimate ($3.37B consensus)	Beat
Non-GAAP Diluted EPS	Q2 FY 2026	—	$1.27	+$0.03 above consensus estimate ($1.24)	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-GAAP Diluted EPS	FY 2026	$5.23 to $5.37	$5.29 to $5.39	+$0.06 at low end, +$0.02 at high end	Raised
Total Sales Growth	FY 2026	3% to 5%	4.5% to 5.5%	+1.5 pts at low end, +0.5 pts at high end	Raised
Adjusted EBITDA Growth	FY 2026	mid-single digits	mid to high-single digits	Range expanded from mid- to mid-to-high single digits	Raised

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Global Distribution and Value-Added Services	$2.911B	$2.731B	+6.6%
Global Specialty Products	$0.419B	$0.386B	+8.5%
Global Technology	$0.181B	$0.167B	+8.4%
Global Dental Distribution	$1.854B	—	+8.1%
Global Medical Distribution	$1.057B	—	+4.0%
Global Dental Merchandise Growth (Internal)	5.9%	—	—
Global Technology Internal Growth	9.1%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Internal Sales Growth	4.6%	—	—
Adjusted EBITDA	$288 million	$256 million	—
Share Repurchases (Q2)	$200 million	—	—
Year-to-Date Share Repurchases	$325 million	—	—

Management tone

Cyber-recovery reset → Strategic outsourcing & CEO transition → Momentum regained with $200M target → CEO personal accountability for $125M → Momentum validated, guidance raised

The reaffirm-after-a-beat posture from Q1 has flipped to raise-on-beat. One quarter ago, Q1 revenue of 6.3% cleared the top of the FY 3–5% range and management held guidance, citing internal sales growth of only 2.5% as the reason for caution. This quarter, with internal sales at 4.6% and total revenue growth of 6.7%, management raised all three FY metrics and characterized the environment as "sustained momentum have positioned us to raise our FY2026 guidance." The empirical trigger was the internal sales acceleration — the exact watch item flagged in the prior brief — and management responded exactly as the watch predicted a raise would look.

The EBITDA growth language broke a four-quarter pattern. For the FY2025 setup, and again after Q3 FY2025, Q4 FY2025, and Q1 FY2026, management held EBITDA growth at "mid-single digits" while raising or reaffirming EPS. Prior briefs flagged this as the structural tell that EPS gains were coming from buybacks, tax, and interest rather than operating leverage. This quarter's shift to "mid to high-single digits" is the first evidence that management is willing to underwrite operating-leverage-driven EBITDA growth on the record. It's a modest verbal upgrade with disproportionate signal weight given the prior consistency.

Value creation program framing shifted from aspirational to on-track. In Q4 FY2025 management committed to "over $125M by end of 2026" with 2027 flow-through "remains to be determined." In Q1 FY2026 CEO Lowery personally committed to the $125M number. This quarter the framing hardened again: "Our value creation plans remain a top focus for our team, and we are on track to achieve our goals." The "on track" language, coupled with the EBITDA guide raise, is management's first affirmative statement that program savings are booking as planned. It does not yet include a dollar-quantification of realized run-rate — that remains a Q3 watch — but the qualitative posture has shifted from commitment to execution.

Answers to last quarter's watch list

Internal sales growth trajectory — Q2 internal sales growth came in at 4.6%, well above the 3% threshold set as the "validate organic momentum" bar. This is the cleanest resolution of the Q1 concern that headline growth was being carried by FX and acquisitions.

Resolved positively

Value creation program dollar booking in Q2 — Management characterized the program as "on track" and raised EBITDA growth guidance to mid-to-high single digits, but did not disclose a specific Q2 dollar contribution or cumulative run-rate booking against the $125M year-end 2026 target. The EBITDA raise is indirect evidence that savings are flowing through, but the specific quarterly dollar disclosure requested has not arrived.

Continue monitoring

Medical segment growth ex-diagnostics — Medical grew 4.0% in Q2, inside the +4–5% "flu-season noise" recovery band flagged last quarter and materially above Q1's +1.7%. The volatility is confirmed as POC-diagnostics-driven rather than broader medical pressure.

Resolved positively

Gross margin direction with oil pass-through — Gross margin held at 31.8%, flat with Q1 and well above the 31.0% "mitigation working" threshold. The oil "tipping point" flagged in Q1 Q&A did not compress margins this quarter.

Resolved positively

EBITDA growth quantification — Management shifted the qualitative language from "mid-single digits" to "mid to high-single digits" — the first movement in this metric across five consecutive guides. Still not a numeric range, but a directional upgrade. This is the strongest operating-leverage signal HSIC has issued in the covered period.

Resolved positively

AI product disclosure progression — The press release did not add named AI product revenue contribution, attach rates, or subscriber metrics beyond what was disclosed in prior quarters. Global Technology grew 8.2% with internal growth of 9.1%, but no product-level AI decomposition was provided.

Continue monitoring

What to watch into next quarter

Operating margin recovery in Q3 — Q2 operating margin slipped 50bps QoQ to 4.9% even as gross margin held flat. Value creation implementation costs (management previously said H1-weighted) are the likely driver. Watch whether Q3 operating margin recovers above 5.0% (validating the H1-cost/H2-benefit narrative) or slips further (suggesting either the cost hump extends or gross-margin holding is coming at opex expense).

Value creation program dollar disclosure — Two consecutive quarters have now passed without a specific run-rate booking against the $125M year-end 2026 target. The Q3 call is the last window before the year-end target date is within one quarter's reach; anything short of explicit run-rate disclosure by Q3 would leave the target impossible to track pre-print.

Internal sales growth sustain vs. moderate — Q2's 4.6% internal print was the acceleration signal that unlocked the guide raise. Watch whether Q3 holds above 4% (durable momentum) or steps down toward the 2.5% Q1 level (suggesting Q2 was a comp-driven pop, not a run-rate).

Sales growth vs the raised 4.5–5.5% range — The low end of the FY range now requires H2 total sales growth of roughly 4% or better given H1's 6.5% average. Watch Q3 reported growth: a print below 4% would put the low end at risk within a quarter of the raise.

Quantified EBITDA range — Management moved from "mid-single digits" to "mid to high-single digits" without a numeric range. Watch whether Q3 brings the first quantified EBITDA dollar or percentage band; that would convert the verbal upgrade into a hard commitment.

Specialty growth normalization test — Q2 Specialty +8.7% is the second consecutive quarter at the top of the stated 5–8% durable band. Watch whether Q3 finally moderates into the 6–7% mid-band (guide-consistent) or continues to run hot (suggesting either the durable range is understated or a comp cliff is building).

Sources

Henry Schein Q2 FY2026 press release, Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1000228/000100022826000043/exhibit991.htm

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