newsfilter.io
Sep 9, 2026, 4:34 PM ETHealthcare

CooperCompanies — Third Quarter 2026 Earnings Summary

COOCOOPER COMPANIES INC
Source

Financial Performance

  • Total revenue increased 1% year-over-year to $1.066 billion, with 1% organic growth.
  • GAAP diluted earnings per share (EPS) reached $2.24, up from $0.49 in the prior year, driven by a $307.2 million discrete tax benefit.
  • Non-GAAP diluted EPS was $1.15, representing a 4% increase year-over-year.
  • Gross margin was 67% on a GAAP basis (up from 65% in the prior year) and 67% on a non-GAAP basis (down 60 basis points year-over-year).
  • Operating margin was 21% on a GAAP basis (up from 17%) and 26% on a non-GAAP basis (up 30 basis points).
  • Free cash flow increased 66% to $273.0 million, derived from $341.7 million in cash provided by operations less $68.7 million in capital expenditures.
  • Interest expense was $21.5 million, down from $25.4 million in the prior year period.
  • Total assets were $12.673 billion as of July 31, 2026, compared to $12.395 billion as of October 31, 2025.
  • Short-term debt increased to $628.1 million, while long-term debt decreased to $1.916 billion.
  • Deferred revenue totaled $338.3 million ($129.6 million current, $208.7 million long-term).

Guidance and Future Outlook

  • Fiscal fourth quarter 2026 total revenue guidance is set at $1.057 billion to $1.080 billion, with organic growth of 0% to 2%.
  • Fiscal fourth quarter 2026 non-GAAP diluted EPS guidance is $1.05 to $1.09.
  • Fiscal 2026 total revenue guidance is $4.229 billion to $4.252 billion, with organic growth of 2% to 3%.
  • Fiscal 2026 non-GAAP diluted EPS guidance is $4.51 to $4.55.
  • The company reaffirmed a long-term free cash flow objective exceeding $2.2 billion for fiscal years 2026 through 2028.
  • Specific segment guidance for Q4 2026 includes CooperVision revenue of $692–$706 million (organic growth -2% to 0%) and CooperSurgical revenue of $364–$374 million (organic growth 4% to 6%).
  • Specific segment guidance for Fiscal 2026 includes CooperVision revenue of $2.828–$2.842 billion (organic growth 1% to 2%) and CooperSurgical revenue of $1.401–$1.410 billion (organic growth 4% to 5%).

Business Segments and Product Lines

  • CooperVision (CVI) revenue was $717.0 million, flat year-over-year on reported, constant currency, and organic bases.
    • Toric and multifocal revenue grew 2% organically to $363.8 million.
    • Sphere and other revenue declined 1% organically to $353.2 million.
    • Americas revenue declined 2% organically; EMEA grew 5% organically; Asia Pacific declined 5% organically.
  • CooperSurgical (CSI) revenue was $349.2 million, up 2% reported and 3% organically.
    • Office and surgical revenue grew 2% organically to $208.0 million.
    • Fertility revenue grew 5% organically to $141.2 million.
  • CooperVision proactively reduced U.S. channel inventory, which weighed on results and is expected to continue impacting Q4.
  • Fiscal 2025 inventory write-offs related to a product line exit at CooperSurgical contributed to the GAAP gross margin improvement in the current period.

Market and Competitive Landscape

  • The company operates in over 130 countries with a workforce of more than 15,000.
  • Management noted solid fertility growth at CooperSurgical.
  • The company completed a strategic review process to enhance shareholder value, with details provided in a separate press release.

Risks and Challenges

  • Unfavorable foreign exchange rates impacted non-GAAP gross margin and operating margin.
  • Higher manufacturing costs contributed to the decline in non-GAAP gross margin.
  • The company faces risks related to EU medical device regulations, including incremental compliance costs.
  • Significant litigation expense and associated legal costs were recorded in the "Other" category of non-GAAP adjustments ($2.2 million in Q3 2026).
  • The company noted that GAAP guidance cannot be provided due to the inherent difficulty in forecasting acquisition-related, integration, and restructuring charges.

Management Commentary and Tone

  • Al White, President and CEO, stated that the quarter included earnings exceeding expectations, record free cash flow, and a favorable completion of a significant tax matter.
  • Management emphasized a focus on profitable growth, strong cash flow generation, disciplined capital allocation, and maximizing long-term shareholder value following the strategic review.
  • The tone regarding CooperVision was cautious due to the proactive inventory reduction, while CooperSurgical was highlighted for solid fertility growth.

Analyst Questions and Answers

  • No specific analyst questions and answers were included in the provided press release text.

Other Key Points

  • The company repurchased $339.1 million of common stock (approximately 4.9 million shares) at an average price of $69.16 during the quarter.
  • The Board expanded the share repurchase authorization from $2 billion to $3 billion, with approximately $1.5 billion remaining available.
  • A $307.2 million discrete tax benefit was recognized following the favorable completion of a U.K. tax examination regarding the 2021 transfer of intellectual property to the U.K.
  • The company recorded a $2.2 million litigation expense and $2.9 million in legal matters in the "Other" category for the quarter.
  • The company hosts an audio webcast to discuss results, the strategic review, and corporate developments.