Oct 23 (Reuters) – Align Technology (ALGN.O) fell short of Wall Street expectations for third-quarter revenue on Wednesday, citing lower-than-anticipated demand for its clear teeth aligners, particularly among younger consumers. Following the announcement, shares of the company declined by approximately 3.9% in after-hours trading.
The Arizona-based firm reported third-quarter revenue of $977.9 million, representing a 4.9% decrease from the previous quarter and missing analysts’ forecasts of $987.34 million, according to data compiled by LSEG.
In addition to the revenue miss, Align announced a global restructuring plan that will involve job cuts and the transfer of certain positions to different locations. The company anticipates incurring around $30 million in severance payments in the fourth quarter as a result of this restructuring.
Align had previously indicated in July that it expected a sequential decline in clear teeth aligner volumes due to typical third-quarter seasonality, and indeed, volumes fell by 4% during this period.
Analyst Michael Cherny from Leerink Partners noted earlier this month that sentiment in the dental industry remained largely negative as it approached the third quarter. He attributed this to both industry-wide pressures and specific challenges facing Align that have dampened enthusiasm.
“In a statement, Align CEO Joe Hogan remarked that recent reports from analysts and third-party research firms indicate that the U.S. dental market remains sluggish, with similar trends cited by our doctor customers,” Hogan stated.
In July, the company lowered its annual growth forecast, attributing the downturn in demand to rising inflation, which has led consumers to cut back on discretionary spending in favor of essential purchases.
Looking ahead, Align expects fourth-quarter global revenue to range between $995 million and $1.02 billion, slightly below analysts’ expectations of $1.01 billion.
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