Animal Health Focused Patterson Sticks To Annual Guidance Through Uncertainty

Patterson Companies Inc PDCO reported Q1 FY24 net sales of $1.58 billion, up 3.5% Y/Y, almost in line with the consensus of $1.58 billion.

Internal sales increased 2.8%. Reported net sales in the Dental segment reached $567.3 million. Internal sales increased 2.1%. 

Internal sales of consumables increased 4.6%. Excluding the deflationary impact of certain infection control products, internal sales of consumables increased 6.9% Y/Y. 

Compared to the prior year period, internal equipment sales decreased 5.7%, and internal sales of value-added services increased 5.8%.

Animal Health segment sales reached $1.01 billion. Internal sales growth of 4% was driven by growth in the companion animal and production animal businesses.

The company reported adjusted operating margin expansion for the business overall and across Dental and Animal Health segments.

Adjusted EPS of $0.40 in line with the consensus, up 25% Y/Y.

Outlook: Patterson reiterates the FY24 adjusted EPS forecast of $2.45-$2.55 against the consensus of $2.50.

The company says that the guidance reflects the strength of the business and competitive positioning, as well as expectations for the North American and international end markets, which are expected to be affected by the ongoing challenges of inflationary trends and higher interest rates as well as a potential slow-down in the broader economy.

Price Action: PDCO shares are trading 6.5% lower at $31.16 on the last check Wednesday.