COO

It has been about a month since the last earnings report for The Cooper Companies (COO). Shares have added about 0.2% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is The Cooper Companies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. The Cooper Companies reported third-quarter fiscal 2026 adjusted earnings per share of $1.15, up 4.5% year over year. The figure beat the Zacks Consensus Estimate of $1.11 by 3.6%, aided by expense management and productivity initiatives. GAAP earnings per share for the quarter was $2.24, significantly up from the year-ago period's figure of 49 cents, primarily driven by a $307.2 million discrete tax benefit following the favorable completion of a U.K. tax examination. COO's fiscal third-quarter revenues rose 0.6% year over year to $1.066 billion but missed the Zacks Consensus Estimate of $1.099 billion by 3.0%. The quarterly revenues were up 1% year over year at the constant exchange rate (CER). U.S. CooperVision channel inventory reductions weighed on sales. MiSight remained a bright spot, delivering 20% organic growth. For the third quarter of fiscal 2026, CVI revenues were $717.0 million, flat year over year on a reported, CER and organic basis. The segment faced pressure from proactive U.S. channel inventory reductions, which offset underlying demand and strength in several premium product categories. Category-wise, CVI derives revenues from Toric and multifocal, Sphere and others. Toric and multifocal revenues were $363.8 million, up 1% year over year and 2% at CER as well as organically. Sphere and other revenues totaled $353.2 million, declined 2% year over year on a reported basis and fell 1% at CER as well as organically. MyDay toric, MyDay multifocal and MyDay Energys each recorded double-digit growth, while MiSight maintained strong momentum. In the third quarter of fiscal 2026, CSI revenues were $349.2 million, up 2% year over year on a reported basis as well as at CER and grew 3% organically. Category-wise, CSI derives revenues from Office and Surgical, and Fertility. Office and Surgical revenues were $208 million, up 2% on a reported and organic basis as well as at CER. Medical Devices grew 4%, driven by strength in surgical OB/GYN and specialty device portfolios, while Paragard revenues were flat. Management continued to point to genomics and adoption of the Witness automated laboratory management platform as contributors to fertility performance. Fertility revenues were $141.2 million, up 3% year over year on a reported basis, up 4% at CER with organic growth of 5%, supported by broad-based strength across products and services, new clinic wins and expansion within existing accounts. Geographically, growth was led by the Americas, while EMEA and Asia Pac remain mixed as strength across several markets was offset by macro headwinds in the Middle East and China. Within CVI, Americas revenues totaled $281.6 million, down 2% year over year on a reported basis, at CER and organically. The weakness reflected the company's decision to reduce U.S. channel inventory. Management noted that Americas revenues would have grown around 5% without the inventory actions, while underlying U.S. consumption remained at a mid-single-digit growth rate. EMEA revenues were $309.4 million, up 6% year over year on a reported basis and 5% at CER as well as organically, supported by continued strength across premium offerings. Asia Pacific revenues totaled $126 million, down 10% on a reported basis and 5% at CER and organically, with portfolio rationalization and softer conditions in certain markets weighing on performance. In the quarter under review, Cooper Companies' adjusted gross profit declined 0.3% year over year to $711.1 million. The adjusted gross margin was 66.7%, down 60 basis points (bps) from the year-ago period, reflecting higher manufacturing costs and unfavorable foreign exchange. Selling, general and administrative expenses decreased 4.8% to $401.3 million. Research and development expenses fell 6.7% to $41.6 million. Adjusted operating costs totaled $430.4 million, reflecting a 1.5% decrease from the prior-year quarter's level. Adjusted operating profit totaled $280.7 million, up 1.6% from the year-earlier quarter's level. The adjusted operating margin expanded 30 bps to 26.3%, aided by productivity improvements and disciplined expense management. COO exited the third quarter of fiscal 2026 with cash and cash equivalents of $154.7 million compared with $138.8 million at the end of the second quarter of fiscal 2026. Total debt at the end of the fiscal third quarter was $2.54 billion compared with $2.46 billion at the end of the fiscal second quarter. Cooper Companies has issued its outlook for the fiscal fourth quarter and updated its guidance for fiscal 2026. For the fourth quarter of fiscal 2026, Cooper Companies expects revenues of $1.057-$1.080 billion, representing organic growth of 0-2%, and adjusted EPS of $1.05-$1.09. CVI revenues are projected at $692-$706 million, implying organic growth of negative 2% to flat, as U.S. inventory reductions continue. CSI revenues are expected at $364-$374 million, representing organic growth of 4-6%. For fiscal 2026, revenues are now forecast at $4.229-$4.252 billion, with adjusted EPS of $4.51-$4.55. The company expects CVI revenues of $2.828-$2.842 billion, representing organic growth of 1-2% and CSI revenues of $1.401-$1.410 billion, representing organic growth of 4-5%, while reaffirming its objective of more than $2.2 billion in cumulative free cash flow for fiscal 2026-2028. In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -11.07% due to these changes. Currently, The Cooper Companies has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise The Cooper Companies has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Cooper Companies, Inc. (COO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, September 9, 2026 at 5:00 p.m. ET Vice President of Investor Relations and Risk Management - Kim Duncan President and Chief Executive Officer - Al White Chief Financial Officer - Brian Andrews Operator: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2026 CooperCompanies Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Kim Duncan, Vice President of Investor Relations and Risk Management. Kim Duncan: Good afternoon, and welcome to CooperCompanies' Third Quarter 2026 Earnings Conference Call. During today's call, we will discuss the results and guidance, the conclusion of the strategic review and current corporate developments. We will then use the remaining time for questions. Our presenters on today's call are Al White, President and Chief Executive Officer; and Brian Andrews, Chief Financial Officer. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements, including statements relating to revenue, EPS, cash flow, interest, FX and tax rates, tariffs and other financial guidance and expectations, also strategic and operational initiatives, market conditions and trends and product launches and demand. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption Forward-Looking Statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at coopercos.com. Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results under GAAP as well as non-GAAP and refer to the reconciliations provided in our earnings release, which is available on the Investor Relations section of our website under quarterly materials. Should you have any additional questions following the call, please e-mail [email protected]. And now I'll turn the call over to Al for his opening remarks. Albert White: Thank you, Kim, and welcome everyone to our Q3 earnings call. This quarter included a number of notable developments, including earnings exceeding expectations, record free cash flow, solid fertility growth at CooperSurgical and the favorable completion of a significant tax matter. At CooperVision, however, we proactively reduced U.S. channel inventory that weighed on our results and will continue to impact Q4. Importantly, our underlying demand in the U.S. remained healthy throughout the quarter, with consumption increasing at a mid-single-digit rate, and we're now positioned to enter fiscal 2027 with a healthier channel and stronger foundation. We're also taking additional steps to strengthen CooperVision revenue performance, and I'll speak to these in a moment. But first, I want to address the completion of the strategic review, which we announced in a separate press release today. Following a comprehensive evaluation of alternatives, the Board has concluded the strategic review. As part of the process, we conducted a thorough assessment of CooperSurgical, including a potential sale of the business, where we received significant interest and engaged with numerous parties. Ultimately, however, the Board unanimously determined that shareholders are better served by continued ownership than by pursuing a transaction at this time. The Board and our advisers believe several temporary factors influenced valuations late in the process, including developments related to a competitive entrant in the non-hormonal IUD market and the impact of our fertility litigation settlement. These factors contributed to what we believe was a temporary disconnect between CooperSurgical's intrinsic value and the offers received, resulting in proposals that did not adequately reflect the full value and long-term potential of the business. While the formal strategic review has concluded, our commitment to enhancing shareholder value has not changed. We gained valuable insights through the process and will intensify our focus on profitable organic growth and disciplined capital allocation, including share repurchases. The Board and management will also continue to evaluate opportunities to maximize long-term shareholder value and remain open to strategic alternatives that appropriately recognize the value of our operations. Turning to the quarter. CooperVision reported revenue of $717 million, essentially flat year-over-year. EMEA and Asia Pac performed largely in line with our expectations, while the results in the Americas reflected CooperVision's U.S. channel inventory reductions. Moving forward, we see opportunities to strengthen our growth globally through improved execution of our contract wins and product launches. And to support this effort, we're investing in expanded sales coverage, increased customer marketing programs and enhanced commercial execution capabilities, including AI-driven targeting and analytics tools. These initiatives are already gaining traction in Asia Pac, where our new commercial leadership team is fully in place, and in the U.S., where we're actively expanding our sales force organization. These efforts are driving stronger customer engagement, including within our private label business, where new account wins and SKU introductions are expanding our customer footprint and deepening penetration within existing accounts. We're also continuing to invest in our distribution infrastructure, including a new packaging facility in Puerto Rico that will expand direct-to-consumer and direct-to-customer fulfillment capabilities, enhancing service levels and supporting long-term growth. All these actions are well underway and position us to drive greater revenue growth in fiscal 2027 and beyond. Turning to products. Our flagship MyDay franchise continues to perform well, highlighted by double-digit growth in EMEA and double-digit consumption growth in the Americas. This performance was driven by strong customer partnerships, ongoing expansion in high-value categories such as torics and multifocals, growing adoption of our premium MyDay Energys offering and the successful launch of MyDay MiSight. MyDay toric delivered another quarter of double-digit growth, supported by the industry's broadest daily parameter range and the same market-leading toric design as Biofinity. MyDay toric maintains a meaningful competitive advantage, offering approximately 30% more prescription options than any other daily toric lens. MyDay multifocal also delivered another quarter of double-digit growth, supported by its advanced optical design and easy-to-fit platform. With favorable demographic trends and significant room for category expansion, we continue to view multifocals as one of the most attractive growth opportunities in contact lenses. And to build on this, we are preparing to launch MyDay toric multifocal, extending our leadership in optics, parameter range and clinical performance. Finally, MyDay Energys delivered another quarter of double-digit growth, reflecting increasing recognition among eye care professionals and wearers of its differentiated combination of premium optics and advanced material technology. For clariti, performance varied by region, with growth in EMEA offset by softer performance in our other 2 regions. However, our next generation clariti multifocal continues to gain momentum, supported by the same proven fitting design as Biofinity and MyDay. And we also recently completed the clariti family launch in Japan, and initial customer response has been encouraging. Turning to Biofinity. Strength in EMEA and within our market-leading made-to-order portfolio, including toric multifocals and extended ranges, was offset by the inventory moves in the U.S., resulting in a flat quarter. Regarding myopia management, MiSight delivered another strong quarter with 20% organic growth. EMEA and the Americas led performance, while softness in China weighed on Asia Pac, although this was partially offset by growing momentum in Japan following our MiSight launch earlier this year. In EMEA, growth was supported by the ongoing launch of MyDay MiSight with back-to-school campaigns highlighting the benefits of a silicone hydrogel offering. Canada also launched MyDay MiSight in August, and customer feedback has been excellent. Importantly, in these markets that have MyDay MiSight, the MyDay platform now supports patients across every stage of life, from myopia management in children through spherical, toric, multifocal and premium lifestyle offerings in adulthood. Looking ahead, we expect MiSight growth to be in the low teens in Q4 against a difficult prior year comparison, resulting in roughly 20% growth for this full year and setting the stage for a promising 2027, supported by continued momentum in existing markets and the upcoming launch of MyDay MiSight toric. Lastly, on vision, we're accelerating programs tied to new product development, and that ties nicely in with the opening of our Global Vision Center in the U.K. later this month. This state-of-the-art facility brings together R&D, our next-gen technical manufacturing teams and our commercial teams in a single integrated environment. The investment will accelerate innovation, enhance collaboration and enable greater speed to market as we capitalize on one standardized manufacturing platform for all future product development. Turning to CooperSurgical. Revenue was $349 million, up 3% organically. Within this, fertility delivered another solid quarter, growing 5% to $141 million. By product category, fertility growth was driven by broad-based strength across our leading global portfolio of products and services, partially offset by softer capital equipment sales following a very strong prior quarter. Genomics was a notable contributor driven by robust global demand, along with continued adoption of [ RI ] Witness, our automated laboratory management platform. Performance was further supported by new clinic wins, expansion within existing accounts and increasing uptake of recently launched products and services, all resulting in continued global market share gains. Geographically, growth was led by the Americas, where we continue to gain share, while EMEA and Asia Pac remain mixed, as strength across several markets was offset by macro headwinds in the Middle East and China. Stepping back, the long-term fundamentals of the global fertility market remain compelling. Delayed family formation, expanding access to care, increasing treatment utilization and continued investments by fertility clinics supports durable long-term growth. Government support for family building also remains favorable. Earlier this year, Denmark expanded publicly funded fertility coverage from 3 cycles to 6. Japan's reimbursement framework continues to improve access and affordability for assisted reproductive technologies. In the Middle East, investments in reproductive health care infrastructure continue to support growth in the UAE fertility market. And in California, large group health plans are now required to provide coverage for IVF and certain infertility treatments, representing another meaningful step towards expanding patient access. To conclude on fertility, we expect continued strength, including a solid fourth quarter, supported by healthy market trends and growing momentum across our innovation pipeline, particularly in genomics. Turning to office and surgical. Revenue was $208 million, up 2%. Medical devices grew 4%, driven by continued strength in our surgical OB/GYN and specialty device portfolios, while Paragard revenue was flat. Finally, CooperSurgical delivered another quarter of strong operating leverage, reflecting the improved profitability and cash generation of our streamlined business model. Now before turning the call over to Brian, let me leave you with a few key takeaways. At CooperVision, underlying demand remains healthy and our long-term growth drivers remain firmly in place, including continued momentum in MyDay, strong demand for our toric and multifocal lenses and the ongoing success of MiSight. At CooperSurgical, we remain excited about the fertility market and the opportunities ahead, supported by our strong R&D pipeline. Finally, while the strategic review process was extremely challenging for our teams, it provided valuable insights, and we believe we are well positioned to execute our plans and deliver strong performance in 2027 and beyond. With that, I'll turn the call over to Brian. Brian Andrews: Thank you, Al, and good afternoon, everyone. Most of my commentary will be on a non-GAAP basis, so please refer to today's earnings release for a reconciliation of GAAP to non-GAAP results. For the third fiscal quarter, consolidated revenue was $1.066 billion, increasing approximately 1% on both a reported and organic basis. Gross margin was 66.7%, down 60 basis points year-over-year. This was largely in line with our expectations, reflecting higher costs and foreign exchange headwinds. Operating margins increased 30 basis points year-over-year to 26.3%, driven by ongoing productivity improvements. Interest expense was $21.5 million, and our non-GAAP effective tax rate was 15.3%. Before moving to earnings, I want to spend a moment on taxes. During the quarter, we recognized a sizable discrete tax benefit of approximately $307 million following the favorable completion of HMRC's examination of our fiscal 2021 transfer of intellectual property and related assets to the U.K. Importantly, the closure of the examination provides clarity and certainty around a matter that has been under review for several years and is now expected to extend meaningful non-GAAP tax benefits for at least an additional 10 years. Turning to earnings. Non-GAAP EPS increased 4% to $1.15, including approximately $0.03 from tariff refunds based on approximately 193 million diluted shares outstanding. This marks our 11th consecutive quarter exceeding consensus earnings expectations, reflecting disciplined execution, strong operational management and the benefits of the reorganization completed in the fourth quarter of last year. Turning to cash flow. We generated free cash flow of $273 million, the highest quarterly free cash flow in Cooper's history. This was driven by strong operating performance, improving working capital trends and declining CapEx, all of which has contributed to year-to-date free cash flow of $528 million, up 86% from last year. This performance reinforces our confidence in achieving our goal of generating $2.2 billion of cumulative free cash flow in fiscal '26 to 2028. Supported by this strong cash generation, we repurchased $339 million of shares during the quarter, bringing fiscal year-to-date repurchases to $445 million while maintaining leverage below 2x. Given our confidence in the business and commitment to capital returns, the Board approved a $1 billion increase to our share repurchase authorization, bringing the remaining capacity to approximately $1.5 billion for future repurchases. Turning to guidance. For Q4, we expect consolidated revenue of $1.057 billion to $1.08 billion, representing organic growth of 0% to 2%. We expect CooperVision revenue of $692 million to $706 million, down 2% to flat organically. Within this, we expect regional performance trends to be broadly consistent with Q3, with the Americas reflecting the impact of channel inventory actions, EMEA delivering another solid quarter and Asia Pac continuing to face near-term challenges. We expect CooperSurgical revenue of $364 million to $374 million, representing organic growth of 4% to 6%. We expect interest expense of roughly $25 million, reflecting incremental borrowing associated with share repurchases and litigation-related payments. We expect the Q4 non-GAAP effective tax rate to be roughly 16%, resulting in non-GAAP EPS of $1.05 to $1.09. We expect around $170 million of free cash flow, excluding litigation-related payments of roughly $272 million. Our foreign exchange assumptions are largely unchanged from last quarter. In summary, we expect Q4 to be broadly similar to Q3, with the primary differences being greater commercial investments in CooperVision, additional FX headwinds and lower tariff refunds, which will pressure gross and operating margins. Looking ahead to fiscal 2027, it's too early to provide guidance other than to note that our scheduled GILTI increase of roughly 2% in the U.S. taxation of foreign earnings will impact our non-GAAP effective tax rate. All else being equal, we expect this increase -- we expect this to increase our tax rate from roughly 15.5% this year to roughly 17.5% in fiscal 2027. To conclude, despite actions we took within CooperVision that weighed on performance, we delivered another quarter of earnings above expectations and record free cash flow. We also achieved a favorable resolution of HMRC's examination of our 2021 U.K. tax planning initiative and returned significant capital to shareholders. At the same time, we are intensifying our efforts to drive organic growth through new commercial investments and a more streamlined operating model. Together, these initiatives position us to accelerate growth, expand profitability and increase cash generation in the years ahead. Supported by a strong balance sheet and disciplined capital allocation framework, we remain confident in our ability to create meaningful long-term value for our shareholders. With that, I will turn the call over to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Jon Block. Jonathan Block: So Al, previously, the fiscal 2H '26 CVI growth was expected to be up roughly 4%. Now fiscal 2H is expected to be flattish, and you made some comments around consumption. I just want to be clear, is the entirety of that revision inventory related as you did call out consumption of mid-single-digit growth specific to the quarter? I'm just wondering if that consumption assumption was -- also applies to fiscal 4Q. So maybe you can just tease out the plus 4% to 0% in fiscal 2H, how much of that is destock versus underlying fundamentals? Albert White: Yes, Jon, it's all destock. So the consumption in the U.S. market here has been running pretty steady all year in the mid-single digits. It was -- it did in Q3, and it did in the first month of this quarter. So I would expect consumption to remain as is. Meaning the entire reason for the reduction in the revenue guidance for CooperVision was tied to just channel inventory. That's it. Jonathan Block: Okay. I guess there's just an obvious follow-up, which would be, if you're exiting this year at flat off of pretty modest comps, just any high-level thoughts on 2027 CVI? In other words, do we think it can go back to mid-single digits as it would revert back to consumption? Or should we think, hey, you're going to be below market this year, do we think below market next year really until some new products start to come out of the innovation hub? Albert White: Yes. A couple things on that. I mean some of the moves that we're making that you see here in the U.S. with respect to the channel inventory are one that's impacting us. Another one that's impacting us, has been for a little bit and will to end this year, is some of the portfolio rationalization we're doing with our legacy hydrogels. Our legacy hydrogels were down double digit across the board, as we continue to kind of move away from those products. That work we're going to get completed here in our fiscal Q4, and that'll put us in significantly better footing back to kind of CooperVision of old or normal CooperVision, if you will, as we get into 2027. Operator: Your next question is from the line of Jeff Johnson. Jeffrey Johnson: Let me just stick on maybe that same line of question Jon was just asking, and then I've got one other follow-up as well. But on the destock itself, Al, you may have just answered the question on some of the legacy hydrogel stuff, but what is actually driving that destock? And how do we think about the risk that, that bleeds over into the early part of '27? Have you ring-fenced that fairly confidently that this is a -- fiscal Q4 should be the last of it? Or how do we think about like the early '27 potential impact? And then one follow-up. Albert White: Yes. We have ring-fenced that, so to speak. We have gone through that deep, deeply and dug into all the details and where the channel inventory is and what's happening. A lot of it was tied to Biofinity, but there was other. There was stuff with dailies, and there was definitely, definitely inventory that was tied to some legacy hydrogels and some of those kind of products. But we're going to get that behind us here in Q4, or at least the vast majority of it. Same with the rationalization and the moves in Asia Pac so that we get back in good footing and get back to normal, if you will, in 2027. Jeffrey Johnson: Okay. I guess I'll just push you a little bit on that. Just I hear -- by hearing your answer there, the different lines that destocked, but why are they destocking? Has end markets slowed? Did you guys have too much inventory in the channel from past efforts to kind of prop up numbers? Is it competitive new product launches that are just requiring less CooperVision inventory? Just anything there? And then you mentioned APAC there at the end of your answer. I guess my other question was going to be on APAC. Last quarter, you talked about fiscal Q3 being the last of the Cooper-specific issues there, and you felt like the market was kind of flat, maybe down a little bit in Asia Pac and that you could get back towards that market rate in Q4. Has that assumption now changed? And if so, maybe why? Albert White: Yes, I'll touch that one first, Jeff. So on Asia Pac, I would say that market is actually stabilizing to getting a little bit better, which is great news. I think I said last quarter, I'd have to go back and look, that we were finishing up the -- a lot of the rationalization work and positioning work and so forth with respect to the legacy hydrogels and clariti entering. So that's what I'm kind of referencing, saying that similar to last quarter, we're going to finish that up. We were probably halfway through it or maybe a little bit more. We took another chunk out of it here in Q3, and we'll finish that in Q4. So I think you'll get Asia Pac being back to -- relatively back to normal like as we start the year off. If I look at the channel inventory in the U.S., we see channel inventory, kind of go up and go down, and we've seen that many times over the years. We did have channel inventory trend higher here, and that's been for a couple different reasons. Some of it was people buying before price increases, some of it's been consolidation activity, some of it's been buying before things like IT upgrades go in. Most recently here in, like, Q1 and Q2, you saw channel inventory move up associated with buying tied to some of the new private label contracts we won, and that was pushing up inventory without offsetting it in a different spot. So this was something that we took a look at, a long and hard look at and said, "Hey, normally, what would happen here and what's happened in the past is that channel inventory would burn itself off over the next 1.5 years or something like that, and you'd move back to normal." And rather than doing that and dealing with that as we have many times over the 20-plus years I've been here, we decided to go ahead and proactively accelerate that and just get that taken care of right now in Q3 and Q4 so that we won't have that overhang at all next year, and we'll go back to growth tied to consumption. Operator: Your next question is from Larry Biegelsen. Lei Huang: It's Lei on for Larry. Can you quantify the impact of the U.S. inventory reduction in fiscal Q3? I mean you talked about consumption being in the mid-single digit. So is that different versus what you reported for CVI? Is that the magnitude of inventory reduction in the quarter? And what's assumed about the impact of the inventory in fiscal Q4? And I have a follow-up. Albert White: Yes. So Lei, yes, just to be clear on that, the Americas would have reported growth around 5% in Q3 if we hadn't made the inventory reduction moves. We would envision Q4 is actually going to be pretty similar to what Q3 was, I would say, for the Americas, for EMEA and Asia Pac. So you'll have a similar inventory reduction that'll occur in Q4 in the U.S. Lei Huang: Okay. So the magnitude should be similar, you're saying, for the inventory reduction in Q4? Albert White: That's right. Lei Huang: Okay. And then my other question is around the P&L for Q4. So I'm backing into an operating margin somewhere in the mid-20%, just based on your EPS guidance. That would be down sequentially as well as year-over-year. So one, just want to check that. And two, what's driving that lower margin? I mean you have a tariff benefit in fiscal Q3. Is it all inventory related? Or are there other factors in there? And if there's anything in your EPS guide about additional buyback in fiscal Q4? Albert White: Sure. So nothing in the guidance with respect to buybacks, answered that one. When you look at your operating margin thinking, you're in the ballpark, and Brian kind of touched on it, the factors being tariffs, being FX is a little bit more negative, and then being investments in CooperSurgical. So we have started that investment activity in CooperSurgical. We started it during Q3, actually. So you're going to -- we're starting to see the impact of that. Now we'll get a return on that, of course, next year, but you're starting to see the impact this year. Operator: Your next question comes from the line of Jason Bednar. Jason Bednar: Sorry to hammer here and beat a dead horse, but I'm going to ask another one on the destock. Just a question on your confidence that this is just an Americas issue that won't bleed over to EMEA, and maybe talk about how Americas is benchmarked versus EMEA so we can have confidence that this issue just doesn't extend over to that geography and visibility that you have into the channel there? And maybe why not -- maybe take it from a different perspective, why not make some moves in EMEA so that channel or that geography is on healthy footing heading into fiscal '27? Albert White: Yes. So the difference is EMEA is a much greater subscription-based market. We're actually seeing the U.S. move in that direction. That's one of the things I was talking about with the new Puerto Rico facility, is that you're seeing more direct-to-consumer shipping activity. You see that in EMEA right now. That kind of prevents you from having like these inventory -- these big inventory swings and so forth. So we just don't really see that in EMEA. I mean you can get it with customers and so forth, of course, right? But we just don't have that happening in EMEA, so I'm not worried about it in that region. When you look at the U.S., it's centered on a relatively small number of players, if you will, between distributors and some online e-commerce. So it's pretty easy to straightforward tackle it, and that's what we did. And it's pretty easy to get an understanding about how much channel inventory is out there, what levels people need to hold in order to maintain customer service requirements and so forth. And you can look at that delta, and that's how you ring-fence it, so to speak, to be able to say, "Hey, I can do this, and I can quantify it within a couple of quarter period." Jason Bednar: All right. That's helpful. And then Al or Brian, I think you both discussed today investments in CVI sales, marketing and R&D. Usually, that type of approach that's needed to accelerate growth comes at the expense of margins, even if temporarily. But it doesn't seem like that's what you're suggesting today. So can you talk a bit more about the investment buckets and then your confidence level in posting margin improvement next year in the face of the spending, knowing that we've already gone through some cost-down efforts coming into this fiscal year? Brian Andrews: Sure. I'll take that one. Yes. So the commercial investments in sales force expansion, marketing programs, new product development, those -- the sales force adds tend to be a short-term detriment to margins. As we bring in those sales force, train them up, get them deployed, that will be a short-term detriment for longer-term benefits. So we are addressing sales force expansion across our businesses, across regions. So I'm not going to get into 2027 guidance right now. Obviously, we've been leveraging parts of the P&L, and we continue to leverage that, and you see that drop through in profitability and earnings. But in terms of next year, we'll get into next year in December in terms of how that's going to impact how the moves to drive long-term sustainable organic growth will impact our year, including gating in December. Operator: Your next question is from the line of Robbie Marcus. Robert Marcus: Great. Two from me. One, when did you first start the destocking? And where are you now with channel inventory? I don't know if you measure it in days in the U.S. Where was it in the beginning of the year? And where was it last year, just so we could get a sense? And then I have a follow-up. Albert White: Yes. So I would say -- well, I don't want to go, kind of, back and like build out by quarter. I don't think that's going to do anybody any good. But I look at it and say that we're, I would say, halfway through it. We did it here in Q3, and we're going to do the other half of it in Q4. Robert Marcus: Okay. But you're not willing to say if this year ran at above average or below average or? Albert White: Well, this year ran above -- has run above average. As I mentioned, like there was stocking associated with some of the new private label contracts we've won, as an example, that has pushed up distributor inventory that we saw in Q1 and Q2, as an example. Robert Marcus: Great. And then I know you're not giving '27 guidance. I think we're all grappling with so much of the movement and changes in guidance throughout the past several quarters. But maybe are you okay with leveraged EPS growth next year and maybe like a 3% to 4% top line, still a touch lower than where the Street is? Or does the step-up in tax preclude the ability to get leveraged EPS growth? Brian Andrews: Yes. As for as much as I'd like to give commentary on next year, I'm just not going to get into it right now, not until December. Operator: Your next question is from Joanne Wuensch. Joanne Wuensch: I'm going to try it from a different angle. If the third quarter and the fourth quarter are negatively being impacted by the channel inventory and the contact lens market is growing 4% to 6%, is it reasonable to assume that next year, you can grow within the range of the market? Albert White: Yes, that is reasonable. I would say a couple things, Joanne. Let me give just a little color on that because your question is very fair. Like we don't have a manufacturing issue. Our team is strong. We're producing product. We don't have a distribution or logistics issue. We don't have a problem winning contracts. We've won a number of contracts. Where we've struggled is execution at the end of that, is actually executing and delivering revenues. So it's, kind of, like we're moving through this entire process, which is one of the things that's kept me optimistic, but then we're not converting at the very last stage of that. That actual commercial execution is where the struggling has happened. So the sales force execution, this additional marketing, the intensity around that kind of stuff and targeting and so forth, is the key to success for us, right? It's not products. It's not getting customer products. It's not winning contracts. It's executing at the end on the sales. We don't have enough salespeople out there. Like, hindsight 20/20, we should have moved faster on this. Like, we don't have enough salespeople on the street. We have quite a bit less than our competitors have out there right now. So this is a matter of doing that last stage of investing. And we're on top of that. We're moving as fast as we can right now on that. I'm not expecting this channel inventory to bounce back. We're taking it out, and we're going to manage it more aggressively to ensure stability there, but I do expect better execution. We have a long history of strong execution, so I'm confident in the team and that we'll deliver that. Operator: Your next question is from the line of Steve Lichtman. Steven Lichtman: I just want to switch gears to CSI, and on the decision to keep the business. You pointed to the valuation disconnect. But as you look at the 2 businesses together, coming off of this process, what was management and the Board's ultimate assessment of why the 2 together are stronger than apart? Because, obviously, the lack of obvious synergies has been one of the questions from investors. Albert White: Yes. Well, I would say that it's really the P&L at the end of the day because if you take a look at the shared services concept that we deployed, remember, we did the restructuring in Q4 of last year, and you've seen the savings. I mean I know there's frustration over revenues. I have frustration over revenues, but I think this was something like our 11th straight quarter of beating earnings expectations. And some of those quarters, we've beaten earnings expectations by 5%, 10%. I mean we beat earnings this quarter with CooperVision coming in way under what revenue expectations were. So the strength of the P&L, when I look at it from the perspective of operating leverage and being able to drive that and drive cash flow, highest quarterly cash flow we've ever had in the company. And as Brian said, we're going to keep delivering a lot of cash flow. At the end of the day, yes, you're right, we have 2 different businesses. But the back office when it comes to finance, IT, legal and HR, and so forth, can support very effectively both of these businesses so that we can generate good earnings and really strong cash flow. And then we need to deploy that cash flow to stock buybacks, and we did a lot of buybacks this quarter. We're going to generate a lot of cash next year, and that's going to continue to be our focus. So that's where the logic comes in of having the 2 companies together, and proof is in the pudding, which we've done. Now we need to get revenue growth going, and I get that. Within vision, surgical is actually plugging along fine. Even through all these disruptions, I mean, this was an incredibly disruptive process. Like, we thought we were going to sell CooperSurgical. Let's be clear about that. Like, I got on the last call, and I talked about that. Like -- so everybody at this company was working on their normal jobs, on the sale of the business. Every piece of planning that we were doing, every budgeting, every IT plan had to go and have a with and without each of them, and so forth. But we got through that. We got through the exercise, and we still delivered the earnings, and we killed the free cash flow. And now we turn our attention back to where it needs to be, which is driving revenue growth within CooperVision and investing heavier in CooperVision. And that's what we're going to do next. So it's one more box we need to check, and I think that's the last one that we need to check. But that's the logic of having the businesses together. Steven Lichtman: Got it. Great. And then just a follow-up to that, in terms of use of free cash looking forward beyond stock buybacks, you may have mentioned this in your release tonight, but is it fair to say that relative to inorganic, that vision is going to be a higher focus now than on CSI, all else equal? Albert White: 100%, yes. The very heavy focus right now on CooperVision organic growth. That's where we need to put our attention. That's where we are putting our attention, and that's where we're putting our money. That doesn't mean that CooperSurgical is not going to do well and get its investments because fertility is very important to us. And we're strong on the med device side, and we're going to continue to invest and grow those businesses. But the number one focus, clear and away, is driving organic growth at CooperVision right now. Operator: Your next question is from the line of David Saxon. David Saxon: Maybe one on CVI, and I'll ask one on CSI as my second. So just on CVI, a follow-up to the sales and marketing investments. Like, are there specific regions that need those additional resources? Do you need those additional sales reps to get to the mid-single digits next year? And then would love to just get your latest take on pricing and how the markets -- how you're feeling about the market's ability to take price? Albert White: Sure. So when it comes to the sales force expansion, I would start that with the U.S. market because right now we are -- we've got consumption growing mid-single digits. That's probably in line roughly with where the market is. We should be doing better than that. Given the contracts we've won and so forth, we should be growing faster than market here. The addition of this direct sales force and the expansion that we're doing right now is going to add coverage for something like 5,000 additional doors. So that's a big deal for us. Do we need to get that sales force in place to get to mid-single digit? No, because that's what we're doing right now on a look-through basis. Should we be accelerating that doing better? Yes, we should be. When I look at Europe, they're in a good spot. I challenged the European team there. We have a great, fantastic leader running Europe over there, and I've challenged him to maybe look at some expansion and hiring some more salespeople. Asia Pac is in pretty good shape right now. I just talked to the Head of Japan, great guy, energized. He's got some really good ideas. I really -- I'm excited about what he's doing. He's doing some hiring over there to focus in some different areas of the markets where we don't currently compete. And he needs to keep doing that. I stressed that to him and the rest of the team, invest, drive growth. We're going to get -- these are all high-return models, like we are going through this from a return perspective. I feel good about that. But -- so anyway, that gives you a little bit of color on the worldwide side. Pricing, I would say, when I look at pricing and when I look at product mix, it's still pretty good in the industry. The higher-priced products are doing better. We see that with our competitors. We see that with products like MyDay MiSight, the MyDay torics and multifocals, and so forth, continue to perform better. So higher-priced products doing better. And there still remains the potential to take price. Like, inflation is still out there. We see that, and there's still the potential for us to be able to take price, and we're actively looking at that right now. David Saxon: Okay. Great. And then on CSI, maybe just talk about what you're seeing in terms of cycle trends, what the outlook is going into fiscal '27? And then you mentioned Paragard competition in the release. So I would love just an update there. I think that competitive launch was in August, so curious if you're seeing any impact there. Albert White: Sure. On the fertility side of things, we are seeing growth in cycles, and that's a positive. The other thing we're seeing is we're hurdling through that year period where we have some consolidation and you're starting to see fertility clinics investing more. There's more capital equipment opportunities out there. Our genomics team is absolutely killing it. They're doing a great job taking a whole bunch of market share. We have somewhat of a new fertility team that started probably 6, 12 months ago that is really doing that. Our new leader, she's just fantastic, and she's doing a great job and killing it. So I'm super optimistic about the fertility market. Anybody who thinks that's not a good market or that, that litigation settlement is going to disrupt our momentum and progress is just wrong. I just don't see that in the market. When you look at the Paragard competition, we've talked about that in the past. We are the only -- Paragard is the only non-hormonal IUD in the market right now. There is a competitive product that received approval, that was bought, that it closed during this past quarter for us. They started their training, and that product will get launched at some point in the future, and there's concern about that. And at this point in time, I'm going to hold off giving any guidance or commentary above and beyond what we've already given, but we'll certainly have a lot more color to be able to give on the December call. Operator: Your next question comes from the line of Navann Ty. Navann Ty Dietschi: Just on the CSI post-strategic review, you mentioned some insights from that review. So can you maybe discuss that into more detail and the levers that you mentioned, including investment that you started in the quarter to drive fertility growth? If you could give more details. Brian Andrews: Navann, it's a little difficult to hear. I think you were asking for the impact of -- or the -- did you say the impact from the strategic review tied to CSI? Can you repeat your question? Navann Ty Dietschi: Yes. I think Al mentioned that you gained some insight from the strategic review, and also mentioned some investment that you started in the quarter to drive fertility growth. If you could discuss that into more detail. Albert White: Sure. So the insights is an important one because one of the things that the strategic review did was to really drill down into the profitability of our portfolio, all aspects of our portfolio, frankly, and take a look at profitability by product and take a look at profitability by geography and relationship. One of the areas where we've seen significant improvement is the profitability of CooperSurgical, and what it did is it kind of highlighted other areas where there's some opportunity for us to do a better job in terms of driving ongoing profitability improvement. So we're going to learn from that. Like, we learned a lot from the strategic review. It uncovered some different things, and it's going to make us a better company. It is making us a better company today. I mean, right now, we are doing investments within fertility. We've added some investment activity, including within R&D. We have great new Head of R&D who's running that organization and pulling forward some launches. We've got some exciting stuff going in genomics there with some new launches and some expanded products that we have. So I would say we're continuing -- and that's where we're putting dollars. We're putting number one, first and foremost, is CooperVision organic growth. And number two, though, after that, is fertility, where we are continuing to invest. And we believe that those investments are going to drive good fertility growth, and we also believe that some of the stuff that we've uncovered in the insights is going to give us opportunity to continue to drive leverage in that business. Navann Ty Dietschi: And you also mentioned the -- in the press release, the valuation impact of the fertility settlement. Is that fully settled? Or is there anything else we should know about? Albert White: That is fully settled. So there's nothing new on that. There was concern that, that settlement -- you'll remember, that was from an issue we had in 2023. There was a concern that, that settlement would negatively impact our ongoing sales, not our operations. We haven't had any issues since then associated with the media and so forth. So I just don't believe that's accurate, and we haven't seen that. We didn't see it in Q2. We didn't see it in Q3. We're certainly not seeing it as we get rolling here in Q4. But I appreciate whether that was a true concern or a negotiating tactics, hard to tell. Operator: Your next question is from the line of Anthony Petrone. Bradley Bowers: You have Brad Bowers on for Anthony. Just maybe wanted to ask one about the overall strategy or dynamics underlying the CVI business. Obviously, slowdown in growth is not unique to Cooper, but still growing. Below growth we got into destocking dynamics, but obviously you had also taken some share in some of the wider SKU ranges and, obviously, some of the new products with the MyDay. It sounds like the Americas growth is strong, but you even admit you wish you were growing better. So wanted to hear about some of the more competitive dynamics and the confidence that those remain in your favor. Albert White: I would say that those remain in our favor. So nothing has changed with respect to that. I will say that the area where losing share is the wrong word, but where we don't operate is kind of in the super premium segment. There's a part of the market, especially on the daily side, that we refer to as super premium. It's really high-priced products. And that's just not an area that we compete in right now, and that's shown a lot of growth, and it has very high revenue per patient. So where we continue to do well, we continue to win patients. Our revenue per patient is not close to where some of our competitors are, and a lot of the market continues to get driven by that really premium segment. Now we are launching -- we've launched MyDay MiSight into that more premium segment. That's what's being launched into Europe. So I think there's some potential for us to gain some ground there. But that would be -- if I had to highlight 2 things, that would be one of them, is not having products in the super premium space. And then the other one would be the desire to rationalize some of our legacy hydrogel products. Again, we're definitely seeing the negative impact from that. Bradley Bowers: That makes sense. But obviously, punching above your weight, given the underinvestment in -- not underinvestment, but smaller sales force than competition, obviously, that is a tailwind. But just wanted to hear, maybe remind us, how productivity kind of ramps there. Obviously, the base is now lower, so it does, kind of, imply getting back towards that high -- mid to even high single digits, to your point, getting above consumption. And then also just yen impact obviously apparent, maybe the opportunity that, that would be obscured, if there is strong growth in the U.S. by some of the OUS impacts. Just maybe help us figure that out as well. Albert White: Sure. Just one quick point because Brian just said that. I meant MyDay Energys. I think I said MyDay MiSight, but MyDay Energys is the premium product. With the sales force, I would say, if I had to put some parameters around that, we're recruiting now. We'll get people in trained and have them out on the street executing, I would say, probably in early mid-fiscal Q2. So from that perspective, right, they need to visit offices and start doing their jobs and so forth and pulling revenues in. So that's probably a positive impact more in the Q3, Q4 time frame. Now I do think early in the year, we'll continue to have consumption be solid. So we'll still put up good results, but I believe we'll accelerate a little bit off that as we get the benefit from those employees. Frankly, same thing when I look at some of the other markets around the world. Operator: Your next question is from the line of Brett Fishbin. Brett Fishbin: I have to say, a lot of mine have been asked, so maybe just a follow-up on kind of the last point. I was going to ask about your thoughts on underlying market share dynamics, just given the full year CVI growth guide for the Americas. It sounds like a lot of it has to do with sales force and you're looking at some incremental investment activity. So maybe just the first part, is there anything else that stands out that you think might be driving, call it, full year growth in the Americas below market outside of that? And then the second follow-up question is just how you're feeling about the product portfolio. I think your point about super premium lenses is really interesting. So just curious, like, how you feel about current offerings and maybe how active the R&D pipeline might be in regard to some new ideas or even new brands. Albert White: Sure. I would say on the selling side, I would go back to sales execution. Like, we've won some great private label contracts here in the U.S. with a few of the buying groups. We've won some really nice contracts in Asia Pac. Historically, when we win those contracts, we would see the sales execution turn those into revenue growth. And that's what we've expected more of that, right? You've seen that in some of the guidance. You've seen it in some of my commentary. That's where that has not come to fruition yet. And where -- when we looked at it and peeled back the onion and said, "Well, why? What is the difference? What's happening?" We have a full portfolio out there right now. I feel good about the portfolio. It's arguably the most robust that we've ever had, and we didn't build out the sales force and a lot of the marketing support commensurate with the size of the portfolio that we have right now. So we need to do this activity so we can capitalize on these contract wins that we have. I will say with respect to R&D and new products, we have accelerated that activity. We've had a number of meetings with the R&D team and with our commercial team. We are accelerating launch activity that we were looking at in the 2030 kind of time frame and pulling that forward a couple of years. So very, very active on R&D and laser focusing in on some new product introductions that we think are going to be pretty damn exciting. We were a little too broad on some things, so narrowing that down and executing and getting some new products into the marketplace is going to be beneficial for us. And I won't go too far on that yet, but we will spend some time in the nearer future going through some of those details. Operator: And our final question comes from the line of Issie Kirby. Issie Kirby: I think most of mine have been asked as well. But just wanted to touch on Asia Pacific and China, in particular, which has been a drag for quite some time now. Can you remind us of the size of that business for you guys in vision and just how you're thinking about it strategically? Like, does it get to a point where it's really, given the dynamics in the market, not necessarily worth you being there anymore? Albert White: Yes. Well, China was another struggle this quarter. I mean it was the only market, as an example, where MiSight was actually down. It's not -- it has not been a great market for us. So we are reengineering there. We've got a new team in place. We're looking at some different growth opportunities to see the best way to reestablish and drive growth in that marketplace right now. I do believe that, I will say within the context of Asia Pac, after many quarters of negatives and product rationalization in China and some of the other markets, we are definitely coming to an end with that activity. I know you've heard that before, but I'll just tell you, when you look at the size of the business, I mean, it's gotten to be -- it's just relatively small. I mean, I think it's less than 2%. It is less than 2% of revenues this quarter on a consolidated basis. So the business just is getting smaller over there. So it's a great question and a great challenge, and we are looking at seeing if we can reinvigorate that business to drive success. And I do believe there are some opportunities there in some channels, like e-commerce, where we can play differently and be successful. But we're taking a hard look at it right now because we want to get good revenues, if you will, right, profitable revenues and things that make sense. So doing work on it. That's -- and I'll update you more as we get into December and give guidance on next year. Issie Kirby: Can I just really quickly squeeze in a follow-up on what went on with MiSight in China in the quarter? Albert White: Sure. We have not been able to gain traction with MiSight in China. And if I look around the world in other markets that have spectacles, we continue to do fine. As a matter of fact, it just grows the overall marketplace. I think the unique thing with China ends up being Ortho-K, probably more than anything. You've had a lot of pricing pressure on Ortho-K because of government pricing policies, so it's really disrupted that marketplace. There's a lot of knockoffs there. There's a lot of disruption around pricing with Ortho-K. There's a lot of knockoff spectacle lenses and so forth there. So -- although there's massive opportunity with the number of children that have myopia, the market itself is very disjointed right now. Operator: And with no further questions in queue, I will now turn the call back over for closing remarks. Albert White: Thank you, operator, and thank you, everyone, for taking the time. I know we had a lot to discuss today, and I'm sure we'll have a lot of follow-up calls with details. So I appreciate everyone's interest and look forward to catching up and providing an update on our next earnings call in December. Thank you. Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect. Before you buy stock in Cooper Companies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cooper Companies wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $410,024!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,372,815!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management concluded its strategic review by deciding to retain CooperSurgical, citing a temporary valuation disconnect driven by competitive non-hormonal IUD entries and fertility litigation settlements. CooperVision (CVI) results were significantly impacted by a proactive reduction in U.S. channel inventory, despite underlying consumption growing at a mid-single-digit rate. The company identified a critical gap in commercial execution, noting that while they have won significant private label contracts, they lack the sales force density of competitors to convert these into revenue. Strategic rationalization of legacy hydrogel portfolios continues to weigh on results, particularly in Asia Pacific, as the company shifts focus toward high-value silicone hydrogel offerings. Performance in the MyDay franchise remains a primary growth engine, supported by a 30% parameter advantage in the daily toric category compared to competitors. The new Global Vision Center in the U.K. is designed to unify R&D and manufacturing onto a single standardized platform to accelerate speed-to-market for future product launches. Management expects to enter fiscal 2027 with a 'healthier channel' following the completion of U.S. inventory destocking in Q4 2026. A significant expansion of the U.S. sales force is underway, targeting an additional 5,000 doors, with full productivity expected by the second half of fiscal 2027. The non-GAAP effective tax rate is projected to increase from approximately 15.5% to 17.5% in fiscal 2027 due to scheduled GILTI tax increases. Future capital allocation will prioritize organic growth investments in CooperVision and aggressive share repurchases, supported by a new $1 billion authorization increase. R&D timelines are being accelerated, with management pulling forward product launches originally slated for 2030 by several years to address the 'super premium' market segment. Recognized a $307 million discrete tax benefit following the favorable resolution of a long-standing U.K. intellectual property transfer examination by HMRC. Achieved record quarterly free cash flow of $273 million, driven by improved working capital management and declining capital expenditures. Management acknowledged that the strategic review process was 'extremely challenging' and disruptive to normal planning and budgeting cycles. China remains a significant headwind for the MiSight portfolio due to pricing pressure from Ortho-K government policies and local spectacle lens competition. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the entire revision to CVI guidance is inventory-related, not a reflection of slowing consumer demand. The destocking is 'ring-fenced' to Q3 and Q4 of 2026 to ensure no overhang remains for the start of fiscal 2027. Management noted a new competitor received approval and began training in the quarter, which influenced the Board's valuation assessment during the strategic review. Detailed strategic responses to this competition will be deferred until the December guidance call. New sales recruits are expected to be trained and active by early-to-mid Q2 2027, with meaningful revenue contribution appearing in the second half of the year. The expansion is necessary because the current sales force size has not kept pace with the company's expanded product portfolio. Management defended the dual-business structure by highlighting the efficiency of shared services in finance, IT, and legal, which drives high operating leverage. The combined model is credited with delivering 11 consecutive quarters of earnings beats despite revenue volatility.

This article first appeared on GuruFocus. Consolidated Revenue: $1.066 billion, up ~1% reported and organic. CooperVision Revenue: $717 million, essentially flat year over year. CooperSurgical Revenue: $349 million, up 3% organically. Fertility Revenue: $141 million, up 5%. Office and Surgical Revenue: $208 million, up 2%. Gross Margin: 66.7%, down 60 basis points year over year. Operating Margin: 26.3%, up 30 basis points year over year. Non-GAAP EPS: $1.15, up 4% (including ~$0.03 from tariff refunds). Interest Expense: $21.5 million. Non-GAAP Effective Tax Rate: 15.3%. Discrete Tax Benefit: ~$307 million from favorable HMRC examination completion. Free Cash Flow: $273 million (record quarterly high); year-to-date $528 million, up 86%. Share Repurchases: $339 million in the quarter; $445 million fiscal year-to-date. Share Repurchase Authorization: Increased by $1 billion, bringing remaining capacity to ~$1.5 billion. Q4 Revenue Guidance: $1.057 billion to $1.08 billion, organic growth of 0% to 2%. Q4 CooperVision Revenue Guidance: $692 million to $706 million, down 2% to flat organically. Q4 CooperSurgical Revenue Guidance: $364 million to $374 million, organic growth of 4% to 6%. Q4 Non-GAAP EPS Guidance: $1.05 to $1.09. Q4 Free Cash Flow Guidance: ~$170 million (excluding ~$272 million litigation-related payments). Fiscal 2027 Tax Rate Outlook: Expected to rise from ~15.5% to ~17.5% due to GILTI increase. Warning! GuruFocus has detected 2 Warning Sign with COO. Is COO fairly valued? Test your thesis with our free DCF calculator. Release Date: September 09, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Cooper Companies Inc (NASDAQ:COO) exceeded earnings expectations for the 11th consecutive quarter, with non-GAAP EPS up 4% to $1.15. The Cooper Companies Inc (NASDAQ:COO) generated record quarterly free cash flow of $273 million, up 86% year-to-date, reinforcing confidence in achieving $2.2 billion cumulative free cash flow for fiscal 2026-2028. The Cooper Companies Inc (NASDAQ:COO) completed a favorable tax matter with HMRC, resulting in a $307 million discrete tax benefit and expected non-GAAP tax benefits for at least 10 more years. The Cooper Companies Inc (NASDAQ:COO) saw solid fertility growth at CooperSurgical, up 5% organically, driven by genomics and new clinic wins. The Cooper Companies Inc (NASDAQ:COO) is investing in commercial execution, including sales force expansion and AI-driven tools, to strengthen revenue growth in fiscal 2027 and beyond. The Cooper Companies Inc (NASDAQ:COO) proactively reduced U.S. channel inventory, which weighed on CooperVision results and will continue to impact Q4, with revenue essentially flat year over year. The Cooper Companies Inc (NASDAQ:COO) expects Q4 organic growth of only 0% to 2%, with CooperVision revenue down 2% to flat organically due to ongoing inventory reductions and FX headwinds. The Cooper Companies Inc (NASDAQ:COO) anticipates a higher non-GAAP effective tax rate of roughly 17.5% in fiscal 2027, up from 15.5% this year, due to a scheduled GILTI increase. The Cooper Companies Inc (NASDAQ:COO) faces competitive pressure in the non-hormonal IUD market, which impacted the valuation of CooperSurgical during the strategic review. The Cooper Companies Inc (NASDAQ:COO) experienced softness in Asia Pac, particularly in China, where MiSight sales declined and market conditions remain challenging. Q: Previously the fiscal 2H26 CooperVision growth was expected to be up roughly 4%. Now fiscal 2H is expected to be flattish. Is the entirety of that revision inventory related, and does the mid-single-digit consumption assumption also apply to fiscal Q4?A: Al White, CEO: It's all destocking. U.S. consumption has been running steady all year in the mid-single-digits, including in Q3 and the first month of this quarter. The entire reason for the reduction in CooperVision revenue guidance was tied to channel inventory, nothing else. Q: If you're exiting this year at flat off modest comps, can CooperVision return to mid-single-digit growth in 2027, or should we expect below-market growth until new products come out of the innovation hub?A: Al White, CEO: The U.S. channel inventory moves are impacting us, as is portfolio rationalization of legacy hydrogels, which were down around double digits. That work will be completed in fiscal Q4, putting us on significantly better footing and back to normal CooperVision growth as we enter 2027. Q: What is actually driving the destocking, and have you ring-fenced it so it won't bleed into early fiscal 2027?A: Al White, CEO: We have ring-fenced it. A lot was tied to Biofinity, plus dailies and legacy hydrogels. We'll get the vast majority behind us in Q4, along with the rationalization moves in Asia Pac, so we return to normal footing in 2027. Q: Why is the channel destocking happening has the end market slowed, was there too much inventory in the channel, or is it competitive pressure? And has your Asia Pac assumption changed?A: Al White, CEO: Asia Pac is stabilizing to getting a bit better. We're finishing legacy hydrogel and Clarity rationalization work, with another chunk done in Q3 and the rest in Q4. On U.S. channel inventory, it trended higher due to buying ahead of price increases, consolidation activity, upgrades, and new private label contract wins. Rather than letting it burn off over 18 months, we proactively accelerated the correction in Q3 and Q4 so there's no overhang next year. Q: Can you quantify the impact of the U.S. inventory reduction in fiscal Q3, and what's the expected impact in fiscal Q4?A: Al White, CEO: The Americas would have reported growth around 5% in Q3 without the inventory reduction moves. Q4 for the Americas, EMEA, and Asia Pac will be pretty similar to Q3, so a similar inventory reduction will occur in Q4 in the U.S. Q: On the Q4 P&L, we're backing into an operating margin in the mid-20% range, down sequentially and year over year. What's driving that, and is there any buyback assumed in the EPS guide?A: Al White, CEO: Nothing in the guidance with respect to buybacks. On operating margin, you're in the ballpark. The factors are tariffs, FX being a bit more negative, and investments in CooperSurgical, which started in Q3. We'll get a return on that next year, but you're seeing the impact this year. Q: Why are you confident the destocking is just an Americas issue that won't bleed into EMEA?A: Al White, CEO: EMEA is a much greater subscription-based market, which prevents big inventory swings. The U.S. is centered on a relatively small number of distributors and online e-commerce players, making it straightforward to quantify and tackle. That's how we ring-fenced it within a couple-quarter period. Q: You discussed investments in CooperVision sales, marketing, and R&D. Usually that comes at the expense of margins, even temporarily, but that doesn't seem to be what you're suggesting. Can you talk about the investment buckets and confidence in margin improvement next year?A: Brian Andrews, CFO: Salesforce expansion, marketing programs, and new product development the salesforce adds tend to be a short-term detriment to margins as we bring them in, train them, and deploy them, but with longer-term benefits. We're addressing salesforce expansion across businesses and regions. We won't get into 2027 guidance until December. Q: When did you first start the destocking, and where are you now with channel inventory in the U.S.?A: Al White, CEO: We're about halfway through it we did it in Q3 and will do the other half in Q4. This year has run above average, with stocking associated with new private label contract wins pushing up distributor inventory in Q1 and Q2. Q: Are you okay with leveraged EPS growth next year and maybe 3% to 4% top-line, or does the step-up in tax preclude leveraged EPS growth?A: Brian Andrews, CFO: As much as I'd like to give commentary on next year, I'm just not going to get into it right now not until December. Q: If Q3 and Q4 are negatively impacted by channel inventory and the contact lens market is growing 4% to 6%, is it reasonable to assume you can grow within the range of the market next year?A: Al White, CEO: Yes, that is reasonable. We don't have a manufacturing, distribution, or contract-winning issue where we've struggled is commercial execution at the final stage. We don't have enough salespeople on the street relative to competitors, and we should have moved faster on this. We're addressing it aggressively and expect better execution going forward. Q: On the decision to keep CooperSurgical, what was management and the Board's assessment of why the two businesses together are stronger than apart, given the lack of obvious synergies?A: Al White, CEO: It's really the P&L. The shared services model deployed after last year's restructuring drives operating leverage and record cash flow this was our 11th straight quarter beating earnings expectations. The back office in finance, IT, legal, and HR effectively supports both businesses, generating strong earnings and cash flow that we can deploy to buybacks. CooperSurgical is plugging along fine even through the disruption. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

The Cooper Companies, Inc. COO reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.15, up 4.5% year over year. The figure beat the Zacks Consensus Estimate of $1.11 by 3.6%, aided by expense management and productivity initiatives. GAAP EPS for the quarter was $2.24, significantly up from the year-ago period’s figure of 49 cents, primarily driven by a $307.2 million discrete tax benefit following the favorable completion of a U.K. tax examination. COO’s fiscal third-quarter revenues rose 0.6% year over year to $1.066 billion but missed the Zacks Consensus Estimate of $1.099 billion by 3.0%. The quarterly revenues were up 1% year over year at the constant exchange rate (CER). U.S. CooperVision channel inventory reductions weighed on sales. MiSight remained a bright spot, delivering 20% organic growth. Shares of COO were down 15.9% in after-hours trading following the earnings call. The company’s shares have lost 22.5% in the year-to-date period against the industry’s 4.6% growth. However, the S&P 500 Index was up 11% during the same period. Image Source: Zacks Investment Research For the third quarter of fiscal 2026, CooperVision (CVI) revenues were $717.0 million, flat year over year on a reported, CER and organic basis. The segment faced pressure from proactive U.S. channel inventory reductions, which offset underlying demand and strength in several premium product categories. Category-wise, CVI derives revenues from Toric and multifocal, Sphere and others. Toric and multifocal revenues were $363.8 million, up 1% year over year and 2% at CER as well as organically. Sphere and other revenues totaled $353.2 million, declined 2% year over year on a reported basis and fell 1% at CER as well as organically. MyDay toric, MyDay multifocal and MyDay Energys each recorded double-digit growth, while MiSight maintained strong momentum. In the third quarter of fiscal 2026, CooperSurgical (CSI) revenues were $349.2 million, up 2% year over year on a reported basis as well as at CER and grew 3% organically. Category-wise, CSI derives revenues from Office and Surgical, and Fertility. Office and Surgical revenues were $208 million, up 2% on a reported and organic basis as well as at CER. Medical Devices grew 4%, driven by strength in surgical OB/GYN and specialty device portfolios, while Paragard revenues were flat. Management continued to point to genomics and adoption of the Witness automated laboratory management platform as contributors to fertility performance. Fertility revenues were $141.2 million, up 3% year over year on a reported basis, up 4% at CER with organic growth of 5%, supported by broad-based strength across products and services, new clinic wins and expansion within existing accounts. Geographically, growth was led by the Americas, while EMEA and Asia Pac remain mixed as strength across several markets was offset by macro headwinds in the Middle East and China. Within CVI, Americas revenues totaled $281.6 million, down 2% year over year on a reported basis, at CER and organically. The weakness reflected the company's decision to reduce U.S. channel inventory. Management noted that Americas revenues would have grown around 5% without the inventory actions, while underlying U.S. consumption remained at a mid-single-digit growth rate. EMEA revenues were $309.4 million, up 6% year over year on a reported basis and 5% at CER as well as organically, supported by continued strength across premium offerings. Asia Pacific revenues totaled $126 million, down 10% on a reported basis and 5% at CER and organically, with portfolio rationalization and softer conditions in certain markets weighing on performance. In the quarter under review, Cooper Companies’ adjusted gross profit declined 0.3% year over year to $711.1 million. The adjusted gross margin was 66.7%, down 60 basis points (bps) from the year-ago period, reflecting higher manufacturing costs and unfavorable foreign exchange. Selling, general and administrative expenses decreased 4.8% to $401.3 million. Research and development expenses fell 6.7% to $41.6 million. Adjusted operating costs totaled $430.4 million, reflecting a 1.5% decrease from the prior-year quarter’s level. Adjusted operating profit totaled $280.7 million, up 1.6% from the year-earlier quarter’s level. The adjusted operating margin expanded 30 bps to 26.3%, aided by productivity improvements and disciplined expense management. COO exited the third quarter of fiscal 2026 with cash and cash equivalents of $154.7 million compared with $138.8 million at the end of the second quarter of fiscal 2026. Total debt at the end of the fiscal third quarter was $2.54 billion compared with $2.46 billion at the end of the fiscal second quarter. Cooper Companies has issued its outlook for the fiscal fourth quarter and updated its guidance for fiscal 2026. For the fourth quarter of fiscal 2026, Cooper Companies expects revenues of $1.057-$1.080 billion, representing organic growth of 0-2%, and adjusted EPS of $1.05-$1.09. CVI revenues are projected at $692-$706 million, implying organic growth of negative 2% to flat, as U.S. inventory reductions continue. CSI revenues are expected at $364-$374 million, representing organic growth of 4-6%. For fiscal 2026, revenues are now forecast at $4.229-$4.252 billion, with adjusted EPS of $4.51-$4.55. The company expects CVI revenues of $2.828-$2.842 billion, representing organic growth of 1-2% and CSI revenues of $1.401-$1.410 billion, representing organic growth of 4-5%, while reaffirming its objective of more than $2.2 billion in cumulative free cash flow for fiscal 2026-2028. The Cooper Companies, Inc. price-consensus-eps-surprise-chart | The Cooper Companies, Inc. Quote Cooper Companies delivered a mixed third-quarter fiscal 2026 performance, with earnings topping expectations despite softer revenues. CooperVision’s results were hurt by proactive U.S. channel inventory reductions, although underlying consumption in the United States remained healthy at a mid-single-digit growth rate. Strength in premium products continued, with MyDay toric, multifocal and Energys posting double-digit growth, while MiSight delivered 20% organic growth. CooperSurgical remained resilient, led by growth in fertility, supported by genomics, new clinic wins and broader adoption of the Witness platform. CooperVision’s near-term growth is likely to remain pressured as management expects a similar level of U.S. channel inventory reduction in the fiscal fourth quarter. However, the company expects the majority of the destocking and legacy hydrogel portfolio rationalization to be completed by fiscal year-end, positioning the business for a healthier start to fiscal 2027. COO is also stepping up commercial investments through expanded sales coverage, marketing programs and AI-driven targeting tools. New product initiatives, including MyDay MiSight and upcoming toric and multifocal offerings, should support longer-term growth. CooperSurgical remains another key growth driver, particularly in fertility, where favorable treatment trends, growing access to IVF and strength in genomics support the outlook. Following its strategic review, the board decided to retain CooperSurgical after determining that transaction proposals did not adequately reflect the business’ long-term value. Foreign exchange headwinds, higher manufacturing costs and increased commercial investments are expected to pressure margins in the fourth quarter, while continued weakness in Asia Pacific and CooperVision destocking remain near-term concerns. COO currently has a Zacks Rank #4 (Sell). Some better-ranked stocks from the broader medical space are Veracyte VCYT, Globus Medical GMED and West Pharmaceutical WST. Veracyte, currently flaunting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%. You can see the complete list of today’s Zacks #1 Rank stocks here. VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 41.8%. Globus Medical, currently carrying a Zacks Rank #2 (Buy), reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 27.9%. West Pharmaceutical, carrying a Zacks Rank #2 at present, reported second-quarter 2026 adjusted EPS of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. WST has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Cooper Companies, Inc. (COO) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report Globus Medical, Inc. (GMED) : Free Stock Analysis Report Veracyte, Inc. (VCYT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The Cooper Companies (COO) came out with quarterly earnings of $1.15 per share, beating the Zacks Consensus Estimate of $1.11 per share. This compares to earnings of $1.1 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.60%. A quarter ago, it was expected that this surgical and contact lens products maker would post earnings of $1.1 per share when it actually produced earnings of $1.21, delivering a surprise of +10%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. The Cooper Companies, which belongs to the Zacks Medical - Dental Supplies industry, posted revenues of $1.07 billion for the quarter ended July 2026, missing the Zacks Consensus Estimate by 2.97%. This compares to year-ago revenues of $1.06 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. The Cooper Companies shares have lost about 17.4% since the beginning of the year versus the S&P 500's gain of 12.1%. While The Cooper Companies has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for The Cooper Companies was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.20 on $1.1 billion in revenues for the coming quarter and $4.63 on $4.31 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Dental Supplies is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Neogen (NEOG), another stock in the broader Zacks Medical sector, has yet to report results for the quarter ended August 2026. This maker of medical testing kits is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +25%. The consensus EPS estimate for the quarter has been revised 4.4% higher over the last 30 days to the current level. Neogen's revenues are expected to be $208.09 million, down 0.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Cooper Companies, Inc. (COO) : Free Stock Analysis Report Neogen Corporation (NEOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Medical device company CooperCompanies (NASDAQ:COO) fell short of the market’s revenue expectations in Q2 CY2026, with sales flat year on year at $1.07 billion. The company’s full-year revenue guidance of $4.24 billion at the midpoint came in 1.5% below analysts’ estimates. Its non-GAAP profit of $1.15 per share was 2.7% above analysts’ consensus estimates. Is now the time to buy CooperCompanies? Find out in our full research report. Revenue: $1.07 billion vs analyst estimates of $1.10 billion (flat year on year, 2.9% miss) Adjusted EPS: $1.15 vs analyst estimates of $1.12 (2.7% beat) The company dropped its revenue guidance for the full year to $4.24 billion at the midpoint from $4.30 billion, a 1.5% decrease Management lowered its full-year Adjusted EPS guidance to $4.53 at the midpoint, a 1.9% decrease Operating Margin: 20.8%, up from 16.6% in the same quarter last year Organic Revenue rose 1% year on year (miss) Market Capitalization: $13.2 billion "This quarter included a number of notable developments including earnings exceeding expectations, record free cash flow, solid fertility growth at CooperSurgical, and a favorable completion of a significant tax matter. At CooperVision, however, we reduced U.S. channel inventory that weighed on our results and will continue to impact Q4," said Al White, President and CEO of CooperCompanies. "Following the completion of the strategic review, we are focused on profitable growth, strong cash flow generation, disciplined capital allocation, and maximizing long-term shareholder value." With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ:COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services. A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, CooperCompanies grew its sales at a decent 8.3% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers. We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. CooperCompanies’s recent performance shows its demand has slowed as its annualized revenue growth of 5.5% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. CooperCompanies also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, CooperCompanies’s organic revenue averaged 4.4% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results. This quarter, CooperCompanies’s $1.07 billion of revenue was flat year on year, falling short of Wall Street’s estimates. Looking ahead, sell-side analysts expect revenue to grow 5.3% over the next 12 months, similar to its two-year rate. This projection is above the sector average and suggests its newer products and services will help sustain its recent top-line performance. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. CooperCompanies has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 24.7%. Analyzing the trend in its profitability, CooperCompanies’s adjusted operating margin rose by 1.2 percentage points over the last five years, as its sales growth gave it operating leverage. This quarter, CooperCompanies generated an adjusted operating margin profit margin of 20.8%, down 5.2 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue. Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. CooperCompanies’s solid 7% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable. In Q2, CooperCompanies reported adjusted EPS of $1.15, up from $1.10 in the same quarter last year. This print beat analysts’ estimates by 2.7%. Over the next 12 months, Wall Street expects CooperCompanies’s full-year EPS to grow 5.9% from $4.61 to $4.88. It was good to see CooperCompanies beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed and its organic revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 16.8% to $52.91 immediately after reporting. CooperCompanies’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

The Cooper Companies COO is scheduled to report third-quarter fiscal 2026 results on Sept. 9, after market close. The Zacks Consensus Estimate for sales is pegged at $1.1 billion, implying 3.6% year-over-year growth. The consensus estimate for the bottom line is pinned at $1.11 per share, suggesting growth of 0.9%. The earnings per share (EPS) estimates have remained stable over the past seven days. The company delivered an earnings surprise of 10% in the last reported quarter. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 5.8%. What the Zacks Model Unveils for COO Our proven model does not conclusively predict an earnings beat for The Cooper Companies this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below. COO’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank of COO: The company carries a Zacks Rank #4 (Sell) at present. The Cooper Companies, Inc. price-eps-surprise | The Cooper Companies, Inc. Quote The Cooper Companies’ fiscal third-quarter performance is expected to have benefited from continued strength in its CooperVision business, improving fertility trends within CooperSurgical and ongoing operational efficiency initiatives. Management maintained its fiscal 2026 adjusted EPS guidance of $4.58-$4.66 after a strong fiscal second quarter, reflecting confidence in execution despite macroeconomic headwinds in Asia Pacific. CooperVision is likely to have remained the company's primary growth driver during the to-be-reported quarter. Revenue growth is expected to have been supported by healthy demand in the Americas and EMEA, where premium daily silicone hydrogel lenses, particularly the MyDay portfolio, continued gaining traction through expanding customer partnerships and branded contract wins. Biofinity toric and multifocal lenses are also expected to have contributed meaningfully, while MyDay multifocal and Energys likely sustained strong adoption, supported by their premium positioning and broader rollout across markets. Myopia control products are expected to have remained a meaningful growth contributor. MiSight delivered 24% growth in the prior quarter, driven by strong momentum in Japan, encouraging adoption of MyDay MiSight in Europe and expanding consumer awareness campaigns during the back-to-school season. Management indicated that clinician reception remained favorable and investments in additional product launches should continue supporting long-term growth, even as increasing adoption of spectacle-based myopia control products creates some near-term competitive pressure. Within CooperSurgical, fertility trends are expected to have remained favorable as IVF market conditions continued improving across key markets. Management expects the fertility business to return to mid-single-digit growth during the second half after a stronger-than-expected prior quarter that benefited from capital equipment sales and temporary distributor restocking in the Middle East. Continued demand for genomics, consumables and Witness laboratory tracking systems, along with new clinic wins and expansion within existing accounts, is expected to have supported quarterly performance. Regionally, the Americas and EMEA are expected to have maintained healthy growth trajectories, but Asia Pacific is likely to have remained a meaningful headwind. Management had guided for another quarterly decline in the region due to persistent consumer weakness in Japan and China, continued rationalization of legacy hydrogel products and rising e-commerce activity, where The Cooper Companies has relatively lower exposure. On the profitability front, restructuring benefits, disciplined cost management and technology-driven efficiency initiatives are expected to have continued supporting operating leverage during the-to-be-reported quarter. While management projected fiscal third-quarter gross margin pressure from unfavorable foreign exchange, tariffs, freight costs and lower production tied to AI-enabled inventory optimization, the company's back-office consolidation efforts, particularly within CooperSurgical, are expected to have helped offset some of these pressures and support earnings performance. Shares of COO have lost 17.4% in the year-to-date period against the industry’s 7.3% growth. However, the S&P 500 Index has increased 12.2% in the same time frame. Image Source: Zacks Investment Research Some better-ranked stocks from the broader medical space are Globus Medical GMED, Veracyte VCYT and West Pharmaceutical WST. Globus Medical, currently carrying a Zacks Rank #2, reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here. GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%. Veracyte, currently flaunting a Zacks Rank #1, reported a second-quarter 2026 adjusted EPS of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%. VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%. West Pharmaceutical, carrying a Zacks Rank #2 at present, reported second-quarter 2026 adjusted EPS of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. WST has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.4%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Cooper Companies, Inc. (COO) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report Globus Medical, Inc. (GMED) : Free Stock Analysis Report Veracyte, Inc. (VCYT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the medical devices & supplies - diversified industry, including CooperCompanies (NASDAQ:COO) and its peers. The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies. However, the capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers. The 5 medical devices & supplies - diversified stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.9% while next quarter’s revenue guidance was 2.2% below. Thankfully, share prices of the companies have been resilient as they are up 5.3% on average since the latest earnings results. With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ:COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services. CooperCompanies reported revenues of $1.08 billion, up 7.9% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates. CooperCompanies delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 9% since reporting and currently trades at $67.62. Is now the time to buy CooperCompanies? Access our full analysis of the earnings results here, it’s free. With a history dating back to 1931 and products used in over 100 countries, Baxter International (NYSE:BAX) provides essential healthcare products including dialysis therapies, IV solutions, infusion systems, surgical products, and patient monitoring technologies to hospitals and clinics worldwide. Baxter reported revenues of $2.96 billion, up 5.3% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $24.95. Is now the time to buy Baxter? Access our full analysis of the earnings results here, it’s free. Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE:BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties. Boston Scientific reported revenues of $5.44 billion, up 7.5% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a softer quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ full-year EPS guidance estimates. As expected, the stock is down 2.1% since the results and currently trades at $45.08. Read our full analysis of Boston Scientific’s results here. With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE:SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions. Stryker reported revenues of $6.59 billion, up 9.4% year on year. This print met analysts’ expectations. More broadly, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but organic revenue in line with analysts’ estimates. Stryker had the weakest performance against analyst estimates of the whole group. The stock is down 20.2% since reporting and currently trades at $277.82. Read our full, actionable report on Stryker here, it’s free. With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals. Abbott Laboratories reported revenues of $12.59 billion, up 13% year on year. This number surpassed analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter as it also put up a narrow beat of analysts’ full-year EPS guidance estimates. Abbott Laboratories pulled off the fastest revenue growth among its peers. The stock is up 18.3% since reporting and currently trades at $105.65. Read our full, actionable report on Abbott Laboratories here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. 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