Third Quarter 2026
Filed Sep 9, 2026CooperCompanies Announces Third Quarter 2026 Results
Revenue increased 1% year-over-year, with CooperVision flat and CooperSurgical up 2%, while non-GAAP diluted EPS rose 4% and free cash flow increased 66%. GAAP diluted EPS benefited primarily from a $307.2 million discrete tax benefit, and fourth-quarter guidance calls for CVI organic growth of -2% to 0%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1,066.2 million | – | 1% |
| Net salesGAAP | $3,171.8 million | – | 1% |
| Gross profitGAAP | $711.9 million | – | – |
| Gross marginGAAP | 67% | – | – |
| Non-GAAP gross profitnon-GAAP | $711.1 million | – | – |
| Non-GAAP gross marginnon-GAAP | 67% | – | down 60 basis points year-over-year |
| Operating incomeGAAP | $222.0 million | – | – |
| Operating marginGAAP | 21% | – | – |
| Non-GAAP operating incomenon-GAAP | $280.7 million | – | – |
| Non-GAAP operating marginnon-GAAP | 26% | – | increased 30 basis points |
| Interest expenseGAAP | $21.5 million | – | – |
| Non-GAAP interest expensenon-GAAP | $21.5 million | – | – |
| Net incomeGAAP | $432.8 million | – | – |
| Diluted earnings per shareGAAP | $2.24 | – | – |
| Non-GAAP net incomenon-GAAP | $221.5 million | – | – |
| Non-GAAP diluted earnings per sharenon-GAAP | $1.15 | – | up 4% |
| Free cash flownon-GAAP | $273.0 million | – | up 66% |
| Cash provided by operating activitiesother | $341.7 million | – | – |
| Capital expendituresother | $68.7 million | – | – |
| Selling, general and administrative expenseGAAP | $401.3 million | – | – |
| Research and development expenseGAAP | $41.6 million | – | – |
| Amortization of intangiblesGAAP | $47.0 million | – | – |
| Provision for income taxesGAAP | $(231.0) million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CooperVisionRevenue was comparable to last year’s third quarter on a reported, constant currency, and organic basis. | $717.0 million | – | —% |
| CooperSurgicalRevenue increased 2% in constant currency and 3% organically. | $349.2 million | – | 2% |
| CooperVision Toric and multifocalOrganic growth was 2%. | $363.8 million | – | 1% |
| CooperVision Sphere, otherOrganic growth was (1)%. | $353.2 million | – | (2)% |
| CooperVision AmericasOrganic growth was (2)%. | $281.6 million | – | (2)% |
| CooperVision EMEAOrganic growth was 5%. | $309.4 million | – | 6% |
| CooperVision Asia PacificOrganic growth was (5)%. | $126.0 million | – | (10)% |
| CooperSurgical Office and surgicalConstant currency growth and organic growth were 2%. | $208.0 million | – | 2% |
| CooperSurgical FertilityConstant currency growth was 4% and organic growth was 5%. | $141.2 million | – | 3% |
Fiscal fourth quarter 2026 and fiscal 2026 outlook
- RevenueFiscal 2026 total revenue of $4.229 - $4.252 billion (organic growth of 2% to 3%)
- NoteFiscal fourth quarter 2026 total revenue of $1.057 - $1.080 billion (organic growth of 0% to 2%)
- NoteFiscal fourth quarter 2026 CVI revenue of $692 -$706 million (organic growth of -2% to 0%)
- NoteFiscal fourth quarter 2026 CSI revenue of $364 - $374 million (organic growth of 4% to 6%)
- NoteFiscal fourth quarter 2026 non-GAAP diluted EPS of $1.05 -$1.09
- NoteFiscal 2026 CVI revenue of $2.828 - $2.842 billion (organic growth of 1% to 2%)
- NoteFiscal 2026 CSI revenue of $1.401 - $1.410 billion (organic growth of 4% to 5%)
- NoteFiscal 2026 non-GAAP diluted EPS of $4.51 - $4.55
- NoteReaffirm previously communicated long-term free cash flow objective exceeding $2.2 billion for fiscal years 2026 through 2028
Capital returns
- Repurchased $339.1 million of common stock.
- Approximately 4.9 million shares were repurchased at an average share price of $69.16.
- Following expansion of the share repurchase authorization from $2 billion to $3 billion, approximately $1.5 billion remains available under the program.
What drove it
- Total revenue increased 1% on a reported basis, in constant currency, and organically.
- GAAP gross margin improved to 67% from 65%, driven by fiscal 2025 inventory write-offs related to a product line exit at CooperSurgical.
- Non-GAAP operating margin increased 30 basis points to 26%, driven by expense management and productivity initiatives, partially offset by unfavorable foreign exchange.
- The $307.2 million discrete tax benefit followed favorable completion of HMRC's examination of the fiscal 2021 transfer of intellectual property and related assets to the United Kingdom.
- Free cash flow reflected cash provided by operations of $341.7 million less capital expenditures of $68.7 million.
- CooperSurgical fertility revenue grew 5% organically.
Concerns
- CooperVision revenue was comparable to last year’s third quarter on a reported, constant currency, and organic basis.
- CooperVision Asia Pacific revenue declined (10)% on a reported basis and (5)% organically.
- CooperVision Americas revenue declined (2)% on a reported basis and (2)% organically.
- Management said it proactively reduced U.S. channel inventory at CooperVision, which weighed on results and will continue to impact Q4.
- Non-GAAP gross margin was down 60 basis points year-over-year, driven by higher manufacturing costs and unfavorable foreign exchange.
- Fiscal fourth-quarter 2026 CVI organic growth guidance is -2% to 0%.
What to watch
- Fiscal fourth-quarter 2026 total revenue guidance of $1.057 - $1.080 billion and organic growth guidance of 0% to 2%.
- Fiscal fourth-quarter 2026 CVI revenue guidance of $692 -$706 million and organic growth guidance of -2% to 0%.
- Fiscal fourth-quarter 2026 CSI revenue guidance of $364 - $374 million and organic growth guidance of 4% to 6%.
- Fiscal fourth-quarter 2026 non-GAAP diluted EPS guidance of $1.05 -$1.09.
- Execution following completion of the strategic review and the announced actions to enhance shareholder value.
- Progress toward the reaffirmed long-term free cash flow objective exceeding $2.2 billion for fiscal years 2026 through 2028.
Balance sheet and cash flow
- Cash and cash equivalents were $154.7 million at July 31, 2026, compared with $110.6 million at October 31, 2025.
- Short-term debt was $628.1 million at July 31, 2026, compared with $47.8 million at October 31, 2025.
- Long-term debt was $1,916.1 million at July 31, 2026, compared with $2,457.5 million at October 31, 2025.
- Trade receivables, net were $788.9 million at July 31, 2026, compared with $829.0 million at October 31, 2025.
- Inventories were $911.5 million at July 31, 2026, compared with $846.0 million at October 31, 2025.
- Accrued litigation liability was $316.5 million at July 31, 2026, compared with $0.7 million at October 31, 2025.
- Total assets were $12,673.4 million at July 31, 2026, compared with $12,394.8 million at October 31, 2025.
- Stockholders’ equity was $8,328.4 million at July 31, 2026, compared with $8,239.1 million at October 31, 2025.
Analysis
CooperCompanies reported fiscal third-quarter net sales of $1,066.2 million, up 1% from $1,060.3 million, with reported, constant-currency and organic growth all stated at 1%. CooperVision revenue of $717.0 million was comparable with the prior-year quarter across reported, constant-currency and organic measures. CooperSurgical provided the growth, with revenue of $349.2 million, up 2% reported and 3% organically. Fertility was the strongest disclosed CSI category, with 5% organic growth, while CVI Asia Pacific declined (5)% organically.
Profitability improved on a GAAP basis. Gross margin was 67%, compared with 65%, and operating margin was 21%, compared with 17%. The company attributed GAAP gross-margin improvement to fiscal 2025 inventory write-offs related to a CooperSurgical product line exit, and GAAP operating-margin improvement to lower operating expenses as well as fiscal 2025 inventory and long-lived asset write-offs. Non-GAAP operating margin increased 30 basis points to 26%, supported by expense management and productivity initiatives, partly offset by unfavorable foreign exchange. Non-GAAP gross margin was 67%, down 60 basis points year-over-year because of higher manufacturing costs and unfavorable foreign exchange.
GAAP net income was $432.8 million and GAAP diluted EPS was $2.24, compared with $98.3 million and $0.49, respectively. The release identifies a $307.2 million discrete tax benefit as the primary driver of the lower GAAP effective tax rate and the GAAP EPS outcome. Non-GAAP net income was $221.5 million and non-GAAP diluted EPS was $1.15, up 4% from $1.10. Interest expense declined to $21.5 million from $25.4 million, driven by lower interest rates and lower average debt.
Cash generation and capital allocation were prominent. Free cash flow increased 66% to $273.0 million, consisting of $341.7 million of cash provided by operations less $68.7 million of capital expenditures. The company repurchased $339.1 million of common stock, approximately 4.9 million shares, and reported approximately $1.5 billion remaining under its $3 billion repurchase authorization. At July 31, 2026, cash and cash equivalents were $154.7 million, short-term debt was $628.1 million, and long-term debt was $1,916.1 million.
The updated outlook points to a softer near-term CooperVision setup, with fiscal fourth-quarter CVI organic growth of -2% to 0%, which management linked to the proactive U.S. channel inventory reduction. In contrast, fiscal fourth-quarter CSI organic growth is guided at 4% to 6%. Total fiscal 2026 revenue is guided to $4.229 - $4.252 billion with organic growth of 2% to 3%, and fiscal 2026 non-GAAP diluted EPS is guided to $4.51 - $4.55. The company also reaffirmed its long-term free cash flow objective exceeding $2.2 billion for fiscal years 2026 through 2028.
Management, verbatim
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 proactively reduced U.S. channel inventory that weighed on our results and will continue to impact Q4.
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.
Al White, President and CEO of CooperCompanies
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- GAAP effective tax rate for the third quarter was not reported.
- Non-GAAP effective tax rate for the third quarter was not reported.
- Prior-year free cash flow amount was not reported.
- Prior-year cash provided by operating activities was not reported.
- Prior-year capital expenditures were not reported.
- Third-quarter dividend amount was not reported.
- Fourth-quarter and fiscal 2026 gross-margin guidance were not reported.
- Fourth-quarter and fiscal 2026 operating-expense guidance were not reported.
- Fourth-quarter and fiscal 2026 tax-rate guidance were not reported.
- GAAP diluted EPS guidance was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.