Henry Schein, Inc. (NASDAQ:HSIC) Q2 2020 Earnings Conference Call - Final Transcript
Aug 04, 2020 • 10:00 am ET
[Operator instructions] Our first question will come from the line of Steven Valiquette with Barclays.
Great, thanks. Good morning, Stan and Steve. Thanks for taking the question. Yeah, I guess the sales decline in consumables versus equipment was pretty comparable in both North America and international. So I guess going forward, do you expect more of a dispersion maybe in the sales trends between the two categories where consumables could be more resilient and maybe equipment could lag a little bit if it's more economically sensitive or does that equipment lag maybe seem less likely now just given those current trends? Thanks.
A very, very good question, obviously, and one that we deliberate on regularly. We feel that, of course, the consumables, to a large extent, are based on customer visits. We feel that there is strength in that market. Practices are buying product, of course, because they are seeing patients. PPE is important, but it's not a huge part of the total purchase of practitioners. It's a greater percent of the total purchases in the past, but it's not huge. And I think practices are seeing the importance of investing in the practice.
I think practices want to show that they are using modern equipment, in particular, that they are investing in infection control-type equipment, including making sure that their chairs and the imaging equipment and the CAD/CAM is the latest with the best available infection control. So I think we're pretty optimistic on the dental side with consumables and equipment. But obviously, there's no way to predict where this is heading. July was strong both ways, and each of the markets are slightly different. Remember that parts of Europe, like Germany came back much sooner. China came back much sooner, so more normalized right now. But -- and there's this whole new area of infection control equipment. It won't be necessarily hugely material, but will be additive. And I think we have great know-how and access to product in that area.
So I think we remain optimistic on both sides, both on the consumable side, on the equipment side for dental. And likewise, on the medical side, given that there will be a greater demand for testing equipment and we have some good solid manufacturers that are providing us with product. Of course, in the early days, most of that product went to the government, but now it's being made available to the private sector and our channel's picking up a decent share of that availability and market share. So I think both on the consumables and equipment side in dental and medical, we remain optimistic, although you can't predict the future perfectly and all this is subject to our disclosures, but very, very optimistic about the future of the business.
Okay. I appreciate the color. Thanks.
Your next question comes from the line of Steve Beuchaw with Wolfe Research.
Hi. Good morning, and thanks for the time here. I wanted to ask just two quick ones. One