Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How confident are you around the 2.5% underlying growth, and is it more durable than suggested? A: Wayde McMillan, CFO, stated that they are confident in the 2.5% growth figure, which is based on analytics and understanding of customer order patterns. This growth is more than double the rate of 2024, indicating strong business acceleration across all segments.
Q: Can you help us think through the quarterly cadence, especially with tariffs and business momentum? A: Bryan Hanson, CEO, clarified that tariffs impact the bottom line rather than the top line. The ordering ahead was due to ERP cutovers and SKU rationalization, with most impacts expected in Q3.
Q: How does the 2.5% underlying growth compare to internal expectations, and have you seen any additional buy-ahead in April? A: Bryan Hanson mentioned that the 2.5% growth exceeded internal expectations, driven by enhancements in the commercial organization. Wayde McMillan added that Q2 is in line with expectations, with most order timing impacts expected in Q3.
Q: Can you unpack the drivers behind MedSurg's growth, particularly in Infection Prevention and Advanced Wound Care? A: Bryan Hanson explained that growth is driven by commercial execution improvements, existing brands, and new product launches. The focus on delivering commitments and leadership changes have also contributed to the growth.
Q: How are you offsetting the $0.40 earnings impact from tariffs, and what are the key mitigation efforts? A: Wayde McMillan highlighted strong business performance, favorable foreign exchange, and mitigation strategies like optimizing inventory and selective pricing as key offsets to the tariff impact.
Q: Regarding tariffs, are you assuming the 10% rate for Europe remains after the 90-day pause, and how should we think about the annualized tariff impact? A: Bryan Hanson confirmed the assumption of a 10% rate for Europe throughout the year. He advised against annualizing the current tariff impact due to ongoing mitigation strategies and potential changes in tariffs.
Q: How did the Dental segment perform relative to the market, given the slower growth this quarter? A: Bryan Hanson noted that despite slower growth, the Dental segment performed well relative to the market, benefiting from resilient categories and new product launches that provide tailwinds.
Q: Can you characterize how much of the tariff impact is tied to the P&F business? A: Wayde McMillan stated that they are not breaking out the tariff impact for the P&F business separately, as guidance is provided for the whole company. He emphasized the expectation of strong Q2 performance and tariff pressures in the second half.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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