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Earnings call · Jul 2026 (Q3 FY26)

COOPER COMPANIES Q3 FY26 earnings call COO

Sep 9, 2026 Source

Executive summary

The Cooper Companies Q3 FY26 — Earnings Exceed Expectations Amidst Strategic Review Conclusion and U.S. Channel Destocking

The Cooper Companies delivered strong Q3 FY26 earnings and record free cash flow, despite a proactive U.S. channel inventory reduction in CooperVision that impacted reported revenue. The strategic review of CooperSurgical concluded with the Board determining continued ownership is in shareholders' best interest, citing a temporary valuation disconnect. The company is now intensifying focus on profitable organic growth through commercial investments, particularly in CooperVision, and disciplined capital allocation.

Highlights

5

  • Non-GAAP EPS increased 4% to $1.15, marking the 11th consecutive quarter exceeding consensus expectations.

  • Generated record free cash flow of $273 million in Q3, contributing to $528 million year-to-date, up 86% from last year.

  • Favorable completion of a significant tax matter resulted in a $307 million discrete tax benefit and extended non-GAAP tax benefits for over 10 years.

  • CooperSurgical Fertility segment delivered solid organic growth of 5% to $141 million, driven by genomics and new clinic wins.

  • The Board approved a $1 billion increase to the share repurchase authorization, bringing remaining capacity to approximately $1.5 billion, with $339 million repurchased in Q3.

Concerns

5

  • CooperVision reported revenue of $717 million, essentially flat year-over-year, due to proactive U.S. channel inventory reductions.

  • Q4 FY26 consolidated revenue guidance of $1.057 billion to $1.080 billion implies 0% to 2% organic growth, impacted by continued channel destocking.

  • Q4 FY26 CooperVision revenue guidance of $692 million to $706 million implies -2% to flat organic growth due to ongoing channel inventory actions.

  • Operating margins in Q4 are expected to be pressured by greater commercial investments in CooperVision, additional FX headwinds, and lower tariff refunds.

  • The strategic review of CooperSurgical concluded without a sale, with the Board citing a temporary disconnect between intrinsic value and offers received.

Guidance & targets

CategoryTargetConfidence
Consolidated Revenue
$1.057B-$1.080B
high materiality
High
CooperVision Revenue
$692M-$706M
high materiality
High
CooperSurgical Revenue
$364M-$374M
medium materiality
High
Interest Expense
~$25M
medium materiality
High
Non-GAAP Effective Tax Rate
~16%
medium materiality
High
Non-GAAP EPS
$1.05-$1.09
high materiality
High
Free Cash Flow
~$170M
medium materiality
High
Non-GAAP Effective Tax Rate
~17.5%
medium materiality
High
Cumulative Free Cash Flow
$2.2B
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
CooperVision
Americas reflected U.S. channel inventory reductions; EMEA and Asia Pac performed largely in line with expectations. Underlying U.S. consumption grew at a mid-single-digit rate.
MyDay franchise growth: double-digit (EMEA)MyDay franchise consumption growth: double-digit (Americas)MyDay toric growth: double-digitMyDay multifocal growth: double-digitMyDay Energys growth: double-digitMiSight organic growth: 20%
$717Mflat——
CooperSurgical
Delivered strong operating leverage, reflecting improved profitability and cash generation of its streamlined business model.
$349M3% organic——
CooperSurgical - Fertility
Growth driven by broad-based strength across global portfolio, genomics, new clinic wins, partially offset by softer capital equipment sales. Americas led performance.
$141M5% organic——
CooperSurgical - Office and Surgical
Growth driven by Medical Devices segment.
$208M2%——
CooperSurgical - Medical Devices
Driven by continued strength in surgical OB/GYN and specialty device portfolios.
—4%——
CooperSurgical - PARAGARD
Revenue was flat.
—flat——

Product announcements

ProductTypeDetails
MyDay MiSightlaunch
MyDay toric multifocalroadmap
clariti familylaunch

Risks & headwinds

U.S. channel inventory reduction impacting CooperVision revenue Q3 FY26 and Q4 FY26

Caused Q3 CVI revenue to be flat; expected to cause Q4 CVI organic growth to be -2% to flat. Americas would have grown ~5% in Q3 without it.

Mitigation:Proactive reduction to enter FY27 with healthier channel; will be 'behind us' by Q4 end.

Portfolio rationalization of legacy hydrogels Ongoing, to be completed in Q4 FY26

Down double-digit across the board.

Mitigation:Will put the company in a 'significantly better footing' in FY27.

Softness in China for MiSight and overall CooperVision business Q3 FY26 and ongoing

MiSight was down in China; China is less than 2% of consolidated revenue.

Mitigation:Reengineering, new team, looking at different growth opportunities like e-commerce.

Competitive entry in non-hormonal IUD market (PARAGARD) Future launch

Not quantified yet, but a competitive product received approval and will launch.

Mitigation:Management will provide more color on the December call.

Increased GILTI tax rate FY27

Expected to increase non-GAAP effective tax rate from ~15.5% to ~17.5% in FY27.

Commercial execution and sales force coverage in CooperVision Current, with impact expected in early-mid FY27

Under-resourced sales force, not converting contract wins into revenue growth.

Mitigation:Investing in expanded sales coverage (5,000 additional doors in U.S.), increased customer marketing, enhanced commercial execution capabilities.

What to watch in Q4 FY26

CooperVision U.S. Channel Inventory

Q1 FY27
Current Halfway through destocking in Q3, expected to continue in Q4.
Target Healthy channel, no overhang.

Why it matters

Determines if CVI can return to growth tied to consumption without inventory headwinds.

But we're going to get that behind us here in Q4, at least the vast majority of it. Same with the rationalization in the moves in Asia Pac, so that we get back in good footing and get back to normal, if you will, in 2027.

Q&A highlights

Clarify if the entire Q3/Q4 revenue revision for CVI is due to destocking, given mid-single-digit consumption growth, and if that consumption assumption applies to Q4.

Al White confirmed that the entire reduction in CooperVision's revenue guidance for Q3 and Q4 is solely due to channel inventory destocking. He stated that underlying consumption in the U.S. market has been consistently running at a mid-single-digit rate throughout the year, including Q3 and the first month of Q4, and is expected to remain so.

“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.”

asked by Jon Block · answered by Albert White

2 min read 6 chapters

Detailed narrative

Strategic Review Conclusion and Future Focus

The Board concluded its comprehensive strategic review of CooperSurgical, opting against a sale due to a temporary valuation disconnect. This disconnect was influenced by developments in the nonhormonal IUD market and the impact of fertility litigation settlement. The company will now intensify its focus on profitable organic growth and disciplined capital allocation, including share repurchases, while remaining open to future strategic alternatives.

CooperVision U.S. Channel Destocking

CooperVision proactively reduced U.S. channel inventory in Q3, which impacted reported revenue, but underlying consumption remained healthy at a mid-single-digit growth rate. This destocking is expected to continue into Q4, positioning the company for a healthier channel and stronger foundation entering fiscal 2027. The decision was made to accelerate the inventory burn-off rather than letting it normalize over a longer period.

Commercial Investments and Execution in CooperVision

To strengthen global growth, CooperVision is investing in expanded sales coverage, increased customer marketing programs, and enhanced commercial execution capabilities, including AI-driven targeting and analytics. These initiatives are already gaining traction in Asia Pac and the U.S., where the sales force is actively expanding to cover approximately 5,000 additional doors, addressing past execution challenges.

MyDay Franchise and Myopia Management Momentum

The MyDay franchise continues to perform strongly, with double-digit growth in EMEA and consumption growth in the Americas, driven by high-value categories like torics and multifocals, and the MyDay Energys offering. MiSight, the myopia management product, delivered 20% organic growth, led by EMEA and the Americas, with new launches like MyDay MiSight in EMEA and Canada contributing to momentum.

CooperSurgical Fertility Segment Strength

The Fertility segment grew 5% organically, driven by broad-based strength across its global portfolio, particularly in genomics, new clinic wins, and product adoption. The long-term fundamentals of the global fertility market remain compelling, supported by delayed family formation, expanding access to care, and increasing treatment utilization, with government support also contributing positively.

New Global Vision Center and R&D Acceleration

The company is opening a Global Vision Center in the U.K. later this month, integrating R&D, technical manufacturing, and commercial teams. This state-of-the-art facility is expected to accelerate innovation, enhance collaboration, and enable greater speed to market by leveraging a standardized manufacturing platform for future product development. R&D efforts are also accelerating launch activities for new products.

AI-generated summary of the company's earnings call. Not investment advice.