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Why Is Patterson Cos. (PDCO) Down 1.1% 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 1.1% in that time frame, outperforming 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 In Line, Sales Hurt by FX
Patterson Companies reported adjusted earnings per share (EPS) of 40 cents for first-quarter fiscal 2024, on par with the Zacks Consensus Estimate. The bottom line increased 25% from the prior-year quarter’s level.
GAAP EPS in the quarter was 32 cents, up 28% from that recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.58 billion, which lagged the Zacks Consensus Estimate by 0.4%. The top line increased 3.5% year over year. Internal sales, adjusted for the effects of currency translation, increased 2.8% from the prior-year quarter’s figure.
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 2024, dental sales improved 1.7% year over year to $567.3 million.
Dental Consumable
Sales in the sub-segment totaled $352 million, up 4.2% from the year-ago quarter’s number.
Dental Equipment
Sales in the segment declined 6.1% on a year-over-year basis to $137.5 million.
Value-added Services and Other
This segment comprises of technical service, parts and labor, software support services and office supplies. Sales improved 5.6% year over year to $77.7 million.
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 increased 5.3% to $1.01 billion from the prior-year period’s level.
Corporate
The segment recorded revenues of $1.5 million against expenses of $5 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $319.1 million, up 2.2% year over year. As a percentage of revenues, the gross margin of 20.2% contracted approximately 30 basis points (bps) on a year-over-year basis.
Operating expenses amounted to $280.8 million, up 1.1% from the prior-year quarter’s figure.
The company reported an operating income of $38.2 million, up 9.7% from the year-ago quarter’s level.
Financial Position
PDCO exited the fiscal first quarter with cash and cash equivalents of $108.6 million compared with $159.7 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the quarter totaled $253.4 million compared with $302.5 million in the year-ago period.
Fiscal 2024 Earnings Outlook
Patterson Companies reiterated its earnings guidance for fiscal 2024. The company projects adjusted EPS in the range of $2.45-$2.55. The Zacks Consensus Estimate for the same is pegged at $2.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Patterson Cos. has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 1.1% 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 1.1% in that time frame, outperforming 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 In Line, Sales Hurt by FX
Patterson Companies reported adjusted earnings per share (EPS) of 40 cents for first-quarter fiscal 2024, on par with the Zacks Consensus Estimate. The bottom line increased 25% from the prior-year quarter’s level.
GAAP EPS in the quarter was 32 cents, up 28% from that recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.58 billion, which lagged the Zacks Consensus Estimate by 0.4%. The top line increased 3.5% year over year. Internal sales, adjusted for the effects of currency translation, increased 2.8% from the prior-year quarter’s figure.
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 2024, dental sales improved 1.7% year over year to $567.3 million.
Dental Consumable
Sales in the sub-segment totaled $352 million, up 4.2% from the year-ago quarter’s number.
Dental Equipment
Sales in the segment declined 6.1% on a year-over-year basis to $137.5 million.
Value-added Services and Other
This segment comprises of technical service, parts and labor, software support services and office supplies. Sales improved 5.6% year over year to $77.7 million.
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 increased 5.3% to $1.01 billion from the prior-year period’s level.
Corporate
The segment recorded revenues of $1.5 million against expenses of $5 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $319.1 million, up 2.2% year over year. As a percentage of revenues, the gross margin of 20.2% contracted approximately 30 basis points (bps) on a year-over-year basis.
Operating expenses amounted to $280.8 million, up 1.1% from the prior-year quarter’s figure.
The company reported an operating income of $38.2 million, up 9.7% from the year-ago quarter’s level.
Financial Position
PDCO exited the fiscal first quarter with cash and cash equivalents of $108.6 million compared with $159.7 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the quarter totaled $253.4 million compared with $302.5 million in the year-ago period.
Fiscal 2024 Earnings Outlook
Patterson Companies reiterated its earnings guidance for fiscal 2024. The company projects adjusted EPS in the range of $2.45-$2.55. The Zacks Consensus Estimate for the same is pegged at $2.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Patterson Cos. has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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.