Align Technology Inc. stock fell more than 22% in the extended session Wednesday after the maker of Invisalign aligners and other orthodontic products missed first-quarter expectations, saying that the quarter was “tougher than expected” as “COVID lockdowns, weaker consumer confidence, inflationary pressures, and the Russia/Ukraine conflict have created headwinds.” Align said it earned $134.3 million, or $1.70 a share, in the quarter, compared with $200.4 million, or $2.51 a share, in the year-ago period. Adjusted for one-time items, Align earned $2.13 a share. Revenue fell to $973.2 million, compared with $894.8 million a year ago. Analysts polled by FactSet expected the company to report adjusted EPS of $2.25 on sales of $1 billion. Despite the headwinds, Align remains “excited and are committed to realizing the enormous opportunity in front of us to lead the evolution of digital orthodontics and comprehensive dentistry,” Chief Executive Joe Hogan said. Align stock ended the regular trading day down 0.2%.
Align Technology President and CEO Joe Hogan said, “Overall, the first quarter proved to be a tougher than expected operating environment globally and we believe our results primarily reflect three factors: the continued impact of COVID-19 waves in every region and especially in China with its restrictions and lockdowns under their zero-COVID policy; a weaker economic environment and waning consumer confidence driven by increasing inflationary pressures and supply chain disruptions; and the military conflict in Ukraine and fallout across Europe. In addition, with approximately half our business occurring outside of the U.S., unfavorable foreign exchange rates negatively impacted our revenues, margins, and EPS. Notwithstanding these headwinds, Q1’22 total revenues of $973.2 million were up 8.8% year-over-year. This is compared to Q1’21 revenues of $894.8 million which had year-over-year revenue growth rate of 62.4% from Q1’20 to Q1’21. Our Q1’22 operating income was $198.1 million and operating margin was 20.4%.”
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