Henry Schein is restructuring one of the world's largest healthcare distributors around artificial intelligence, a leaner leadership structure, and faster execution - a strategy CEO Fred Lowery laid out in his first earnings call since taking the helm. The plan comes alongside stronger second-quarter results and a leadership overhaul that integrates global supply chain with distribution operations.
Second-quarter net sales rose 6.7% to $3.46 billion from $3.24 billion a year earlier. Net income attributable to Henry Schein increased 9.3% to $94 million from $86 million. First-half sales grew 6.5% to $6.83 billion, while net income rose 2.6% to $201 million.
The company raised its full-year outlook, now expecting sales growth of 4.5% to 5.5%, up from a prior range of 3% to 5%.
"Henry Schein has great assets and capabilities and our customer reach is really unmatched," Lowery told analysts. "After my first few months at the company, I have an increased conviction that there's significant opportunity to improve our revenue growth and improve our profitability."
He said the company is focused on four priorities: accelerating growth, simplifying the business, improving execution, and strengthening customer relationships.
Leadership overhaul
Before reporting earnings, Henry Schein announced one of the most significant leadership changes in its history. The company replaced its long-time executive management committee with a new Henry Schein leadership team and combined its global supply chain organization with its worldwide distribution business.
Chief operating officer Michael Ettinger, chief strategy officer Mark Mlotek, and senior vice president of global supply chain Jim Mullins will transition to senior advisor roles later this year after helping oversee the change.
"By bringing our supply chain teams closer to the customers served by our distribution businesses and enabling direct management of our corporate functions, these changes will further expedite prioritization, accelerate decision making and advance efforts to simplify our operating model," Lowery said.
The restructuring reflects a broader trend across wholesale distribution as companies flatten management structures to respond faster to changing customer demand, supply chain disruption, and evolving technology.
AI moves into customer workflows
Artificial intelligence was the dominant theme throughout Lowery's remarks. Rather than presenting AI as a future opportunity, he described it as a practical tool that helps healthcare providers improve productivity while strengthening Henry Schein's competitive position.
"We're advancing our Henry Schein One technology platforms, including AI-enabled solutions to improve workflows and collections, enhance practice performance and strengthen patient engagement," Lowery said.
13,000 customers now use the company's Dentrix Ascend and Dentally cloud practice-management platforms. Henry Schein is embedding AI into clinical documentation, insurance eligibility verification, claims management, treatment planning, and revenue cycle management. The company is also developing an MCP layer that would let practices use AI agents to analyze operational data across multiple software systems.
"Our customers are looking to Henry Schein to help them operate more efficiently," Lowery said. "These technology solutions uniquely position us to address this growing need."
Cost initiatives and segment growth
Lowery also outlined a multi-year initiative expected to generate more than $200 million in operating improvements through shared services, procurement consolidation, pricing analytics, and additional supply chain automation. The supply chain automation work reflects the efficiency gains tracked in AI for Operations.
Chief financial officer Ron South said Henry Schein expects to exit 2026 with an annualized $125 million run rate from those initiatives, with benefits continuing into 2028. About 60% of this year's improvements are expected to come from lower administrative costs; the remainder from stronger gross margins.
"This is not just about $200 million," Lowery said. "It's about creating a high-performance culture of accountability and continuous improvement while also increasing customer satisfaction."
The company's Global Distribution and Value-Added Services segment drove growth during the quarter. Segment sales increased 6.6%, including 4.5% internal growth. Global dental distribution merchandise sales rose 9.7%, dental equipment sales increased 3.8%, medical distribution sales climbed 4.0%, value-added services revenue increased 5.1%, specialty products sales rose 8.7%, and technology revenue increased 8.2%.
Lowery said the gains reflect both new customer wins and stronger relationships with existing accounts. "We're expanding our share of wallet and converting occasional buyers to actively engaged customers," he said.
Why this matters for executives
Henry Schein joins a growing list of distributors - W.W. Grainger, Sysco, and DNOW - embedding AI into customer-facing applications and internal operations. As pricing pressure moderates, these companies are competing through AI, software, operational excellence, and customer productivity.
For executives, the takeaway is structural. Henry Schein is positioning itself less as a traditional distributor and more as a technology partner to healthcare providers - a shift that may define competitive advantage in wholesale distribution over the next several years. Leaders tracking similar transformations can follow the strategy through AI for Executives & Strategy.
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