Patterson Companies (PDCO) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 net sales declined 2.2% year-over-year to $1.54 billion, with both Dental and Animal Health segments experiencing lower sales; internal sales decreased 2.8%.

• GAAP EPS was $0.15 and adjusted EPS $0.24, both impacted by a $0.06 per share negative effect from the Change Healthcare cyberattack.

• Net income attributable to the company was $13.7 million, down from $31.2 million in the prior year; adjusted net income was $21.0 million, down from $38.6 million.

• $73.3 million was returned to shareholders via $23.3 million in dividends and $50 million in share repurchases.

• Management is implementing cost and operational actions to address challenges and reaffirmed full-year guidance.

Financial highlights

• Consolidated reported sales were $1,541.7 million, down from $1,576.7 million year-over-year.

• Gross margin was 20.3% (up 10 bps); adjusted gross margin was 20.1% (down 50 bps year-over-year).

• GAAP operating margin was 1.9% (down from 2.4%); adjusted operating margin was 2.3% (down from 3.4%).

• Free cash flow improved by $1.8 million year-over-year to $(26.6) million.

• Net cash used in operating activities was $(285.0) million, mainly due to receivables securitization and working capital increases.

Outlook and guidance

• Fiscal 2025 GAAP EPS guidance reaffirmed at $2.00–$2.10; adjusted EPS at $2.33–$2.43.

• Guidance excludes unplanned share repurchases, future acquisitions, and certain non-recurring items, and assumes stable market conditions.

• Management expects sufficient liquidity for working capital and business needs for the remainder of FY2025.