Patterson Companies (PDCO) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 net sales rose 1.5% year-over-year to $6.57 billion; Q4 net sales up 0.1% to $1.72 billion.

• Adjusted EPS was $0.82 for Q4 and $2.30 for the full year; GAAP EPS was $0.74 for Q4 and $1.98 for the year.

• Returned $327.9 million to shareholders via dividends and share repurchases in fiscal 2024.

• Q4 and full-year results were impacted by lower equipment sales and a $0.04 per share hit from the Change Healthcare cyberattack.

• Strategic investments in software, technology, and value-added services advanced capabilities and are expected to drive long-term growth.

Financial highlights

• Q4 gross margin was 21.5% (GAAP), 21.8% (adjusted); operating margin 5.1% (GAAP), 6.0% (adjusted).

• Fiscal 2024 gross margin was 21.0% (GAAP), 21.2% (adjusted); operating margin 3.9% (GAAP), 4.6% (adjusted).

• Q4 adjusted net income was $74.4 million ($0.82/share), down from $82.4 million ($0.84/share) last year.

• Fiscal 2024 net income attributable to the company was $185.9 million, down from $207.6 million in fiscal 2023.

• Free cash flow for fiscal 2024 was $171.3 million, down from $179.8 million in fiscal 2023.

Outlook and guidance

• Fiscal 2025 GAAP EPS guidance: $2.00–$2.10; adjusted EPS: $2.33–$2.43, implying ~3% growth at midpoint.

• Guidance assumes low single-digit sales growth, roughly flat operating margin, and stable market conditions.

• Adjusted guidance excludes ~$29.1 million in deal amortization ($0.33 per share).

• Change Healthcare disruption expected to have a modest negative impact in early fiscal 2025, with improvement by Q4.

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