Patterson Companies Reports Decline in Q3 Fiscal 2025 Financial Performance

Patterson Companies, Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with net sales of $1.57 billion, a decrease of 2.7% from $1.62 billion in the same period last year. The company's gross profit also fell, resulting in a gross profit margin of 20.4%, down from 21.7% in the prior year. Net income attributable to Patterson Companies was $31.3 million, or $0.35 per diluted share, compared to $47.7 million, or $0.52 per diluted share, in the previous year. The decline in profitability was attributed to lower sales in the Dental segment, increased operating expenses, and a rise in LIFO expenses.

In comparison to the previous fiscal period, Patterson's financial results showed a notable decrease in both the Dental and Corporate segments. Dental segment net sales decreased by 6.4% to $596.3 million, while the Animal Health segment saw a slight increase of 0.5% to $972.4 million. The overall operating income for the quarter was $45.4 million, down from $70.0 million in the prior year, reflecting challenges in maintaining margins amid rising costs and competitive pressures.

Strategically, Patterson has made significant moves, including the acquisition of Infusion Concepts Limited and Mountain Vet Supply, aimed at enhancing its product offerings in the veterinary market. The company also completed the sale of its investment in Vetsource for $86.4 million, which contributed to a pre-tax gain of $3.8 million. However, the ongoing impact of a cyberattack on Change Healthcare has continued to affect Patterson's operations, particularly in the Dental segment, leading to litigation and operational disruptions.

Operationally, Patterson's total assets decreased to $2.83 billion as of January 25, 2025, down from $2.90 billion at the end of the previous fiscal year. The company reported a decrease in cash and cash equivalents, which rose to $135.0 million from $114.5 million. The headcount remained stable, with 88.5 million shares of common stock outstanding. Looking ahead, Patterson anticipates that the proposed merger with Patient Square Capital, expected to close in April 2025, will reshape its operational landscape, although it faces uncertainties related to shareholder approval and market conditions. The company has indicated that it does not expect to declare dividends during the merger process, reflecting a shift in capital allocation priorities.