ELAN - IDEXX Labs slips after cutting full year revenue guidance sees softness in clinic visits

2023-11-01 13:04:45 ET

Shares of IDEXX Laboratories ( NASDAQ: IDXX ) on Wednesday fell as much as 6.8% , after the pet healthcare company saw a quarterly same-store decline in its U.S. clinical business and revised its full year revenue guidance.

IDXX stock was last down 3.3% to $386.20 in afternoon trade. Other animal health companies were mixed: Zoetis ( ZTS ) and Elanco Animal Health ( ELAN ) fell 2.1% and 1.9% , respectively, while Phibro Animal Health ( PAHC ) gained 1.8% .

IDEXX ( IDXX ) posted Q3 earnings per share of $2.53, which beat estimates by 16 cents. Revenue increased nearly 9% Y/Y to $916M, but misses expectations by $11.31M.

The company's biggest segment, called "Companion Animal Group" (CAD) and which houses services such as laboratory testing of pets, saw revenue growth of 9%.

However, IDXX CFO Brian McKeon on the earnings conference call said that overall CAD diagnostics recurring revenue gains in the quarter were capped by a same-store fall in the company's U.S. clinical business.

"Same-store U.S. clinic visit declines of 2% were below our expectations for relatively flat clinic visit growth in the second half of 2023," McKeon said.

"We also saw a relative slow down in wellness visits in the quarter, which may reflect some macro impacts on demand at the clinic level," the finance chief added.

Moreover, IDEXX ( IDXX ) revised its full year revenue guidance to $3.635B-$3.65B from a previous forecast of $3.66B-$3.715B. The consensus revenue estimate is $3.68B.

The company also narrowed its full year organic growth guidance to 8.3%-8.8% from a prior range of 8.5%-10%.

"Our organic growth guidance assumes a level of continued pressure on U.S. same-store clinical visits and International same-store sales levels in Q4 reflecting ongoing clinic capacity management dynamics and macro-economic impacts on demand," CFO McKeon said.

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