Patterson Companies, Inc. has reported a mixed performance in its second-quarter fiscal 2024 earnings call, with growth in some areas being offset by declines in others. The company saw sales growth in its dental consumables category, while the equipment category experienced a decline due to macroeconomic conditions and pricing pressure. The Animal Health segment reported a slight increase in internal sales, with the production animal business performing well. However, the company adjusted its fiscal 2024 guidance downwards, expecting a decline in adjusted earnings.

Key takeaways from the earnings call include:

• Patterson Companies reported an increase in consolidated sales for the second quarter of fiscal ’24, reaching $1.65 billion, a 1.6% growth compared to the same period last year.
• The value-added services category experienced rapid growth due to increased demand for software solutions and equipment services.
• The Animal Health segment saw a 0.2% increase in internal sales, while the Dental business segment experienced a 0.2% decrease in internal sales.
• The company revised its fiscal ’24 GAAP earnings guidance range to $2.04 to $2.14 per diluted share and an adjusted earnings guidance range of $2.35 to $2.45 per diluted share.
• The company expects a decline in visits and spending on the companion side of their business for the rest of the year.
• The company highlighted a sustained decline in equipment sales, particularly in 2D and 3D imaging and CAD/CAM spaces.
• Despite the challenges, Patterson Companies reported strong demand for consumables.
• The company also discussed elevated operating expenses due to SAP integration and facility expansion, and is taking steps to moderate costs by tightening discretionary spending.
• Patterson Companies has seen strong performance in its consumables line throughout the fiscal year, and expects to gain market share.

During the call, Patterson Companies also discussed the impact of the pandemic on their operations, noting a slowdown in expansion activity on the dental service organizations (DSOs) side. However, core practices continue to invest in their operations. The company also mentioned that it is too early to determine any permanent market share gains due to a competitor’s cyber attack.

Despite the challenges, Patterson Companies remains confident in its strategy, continuing to invest in distribution capabilities, software offerings, and value-added services. The company has also been working through headwinds related to PPE, and despite the impact on equipment sales, Patterson Companies has performed well in consumables. In the production animal business, the company has been diversifying across species and effectively reaching veterinarians and producers. The acquisition of Dairy Tech has been successful in serving the dairy part of the business, although its overall impact remains relatively small.