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Why Is Patterson Cos. (PDCO) Down 4.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Patterson Cos. (PDCO - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Patterson Cos. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson Companies reported first-quarter fiscal 2025 adjusted earnings per share of 24 cents, which missed the Zacks Consensus Estimate of 32 cents by 25%. The bottom line also declined 40% from the prior-year quarter’s level.
GAAP earnings per share in the quarter was 15 cents, down 53.1% from the bottom line recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.54 billion, which missed the Zacks Consensus Estimate by 3.8%. The top line declined 2.2% year over year. Internal sales, adjusted for the effects of currency translation and the net impact of an interest rate swap, decreased 2.8% from the prior-year quarter’s figure.
Shares of this company were down 8.5% in pre-market trading. The company’s shares have lost 9.8% year to date against the industry's 1.1% growth. The S&P 500 Index has risen 17.9% in the same time frame.
Segmental Analysis
The company currently distributes products through its subsidiaries, Patterson Dental and Patterson Animal Health.
Dental Segment
This segment provides a complete range of consumable dental products, equipment, software, turnkey digital solutions and value-added services to dentists and laboratories throughout North America.
In the first quarter of fiscal 2025, dental sales declined 2.8% year over year to $550.4 million. The decline was led by lower Value-added Services sales and the deflationary impact of certain infection control products.
Dental Consumable
Sales in the sub-segment totaled $344.1 million, down 2.3% from the year-ago quarter’s number.
Dental Equipment
Sales in the segment declined 2.7% on a year-over-year basis to $133.9 million.
Value-added Services and Other
This segment comprises technical services, parts and labor, software support services and office supplies. Sales declined 6.8% year over year to $72.4 million, primarily driven by the negative impact of the cybersecurity attack on Change Healthcare.
Animal Health Segment
This segment is a leading distributor of veterinary supplies to clinics, public and private institutions, and shelters across the United States.
In the fiscal first quarter, sales declined 2.8% to $982.4 million from the prior-year period’s level.
Corporate
The segment recorded a gain of $9 million against an expense of $1.5 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $312.6 million, down 2% year over year. As a percentage of revenues, the gross margin of 20.3% expanded approximately 10 basis points on a year-over-year basis.
Operating expenses amounted to $283.2 million, down 0.9% from the prior-year quarter’s figure.
The company reported an operating income of $29.4 million, down 23.2% from the year-ago quarter’s level.
Financial Position
PDCO exited the reported quarter with cash and cash equivalents of $148.1 million compared with $114.5 million in the fourth quarter of fiscal 2024.
Cumulative net cash used in operating activities at the end of the quarter was $285 million compared with $253.4 million in the prior-year period.
Fiscal 2025 Earnings Outlook
Patterson Companies maintained its earnings guidance for fiscal 2025. The company projects adjusted earnings per share to be in the range of $2.33-$2.43, and the Zacks Consensus Estimate for the same is pegged at $2.36.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.23% due to these changes.
VGM Scores
Currently, Patterson Cos. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Patterson Cos. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Patterson Cos. (PDCO) Down 4.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Patterson Cos. (PDCO - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Patterson Cos. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson Companies Q1 Earnings & Sales Miss, Gross Margin Up Y/Y
Patterson Companies reported first-quarter fiscal 2025 adjusted earnings per share of 24 cents, which missed the Zacks Consensus Estimate of 32 cents by 25%. The bottom line also declined 40% from the prior-year quarter’s level.
GAAP earnings per share in the quarter was 15 cents, down 53.1% from the bottom line recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.54 billion, which missed the Zacks Consensus Estimate by 3.8%. The top line declined 2.2% year over year. Internal sales, adjusted for the effects of currency translation and the net impact of an interest rate swap, decreased 2.8% from the prior-year quarter’s figure.
Shares of this company were down 8.5% in pre-market trading. The company’s shares have lost 9.8% year to date against the industry's 1.1% growth. The S&P 500 Index has risen 17.9% in the same time frame.
Segmental Analysis
The company currently distributes products through its subsidiaries, Patterson Dental and Patterson Animal Health.
Dental Segment
This segment provides a complete range of consumable dental products, equipment, software, turnkey digital solutions and value-added services to dentists and laboratories throughout North America.
In the first quarter of fiscal 2025, dental sales declined 2.8% year over year to $550.4 million. The decline was led by lower Value-added Services sales and the deflationary impact of certain infection control products.
Dental Consumable
Sales in the sub-segment totaled $344.1 million, down 2.3% from the year-ago quarter’s number.
Dental Equipment
Sales in the segment declined 2.7% on a year-over-year basis to $133.9 million.
Value-added Services and Other
This segment comprises technical services, parts and labor, software support services and office supplies. Sales declined 6.8% year over year to $72.4 million, primarily driven by the negative impact of the cybersecurity attack on Change Healthcare.
Animal Health Segment
This segment is a leading distributor of veterinary supplies to clinics, public and private institutions, and shelters across the United States.
In the fiscal first quarter, sales declined 2.8% to $982.4 million from the prior-year period’s level.
Corporate
The segment recorded a gain of $9 million against an expense of $1.5 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $312.6 million, down 2% year over year. As a percentage of revenues, the gross margin of 20.3% expanded approximately 10 basis points on a year-over-year basis.
Operating expenses amounted to $283.2 million, down 0.9% from the prior-year quarter’s figure.
The company reported an operating income of $29.4 million, down 23.2% from the year-ago quarter’s level.
Financial Position
PDCO exited the reported quarter with cash and cash equivalents of $148.1 million compared with $114.5 million in the fourth quarter of fiscal 2024.
Cumulative net cash used in operating activities at the end of the quarter was $285 million compared with $253.4 million in the prior-year period.
Fiscal 2025 Earnings Outlook
Patterson Companies maintained its earnings guidance for fiscal 2025. The company projects adjusted earnings per share to be in the range of $2.33-$2.43, and the Zacks Consensus Estimate for the same is pegged at $2.36.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.23% due to these changes.
VGM Scores
Currently, Patterson Cos. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Patterson Cos. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.