The Cooper Companies, Inc.

Third-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, and operating margin was 26.3%, up 30 basis points year-over-year. Non-GAAP EPS increased 4% to $1.15, including about $0.03 from tariff refunds. CooperVision revenue was $717 million, essentially flat year-over-year; CooperSurgical revenue was $349 million, up 3% organically, with fertility at $141 million, up 5%. Free cash flow was $273 million, the highest quarterly free cash flow in company history, and year-to-date free cash flow was $528 million, up 86%. For Q4, management guided to consolidated revenue of $1.057 billion to $1.08 billion, organic growth of 0% to 2%, CooperVision revenue of $692 million to $706 million, and CooperSurgical revenue of $364 million to $374 million. Q4 non-GAAP EPS is expected to be $1.05 to $1.09, and free cash flow is expected to be around $170 million, excluding litigation-related payments of roughly $272 million. For fiscal 2027, management said the scheduled GILTI increase should lift the non-GAAP tax rate from roughly 15.5% this year to roughly 17.5%.

Al White framed the quarter as one with strong earnings, record cash flow, and solid fertility performance, offset by deliberate CooperVision inventory actions. He said the board’s strategic review concluded that shareholders are better served by keeping CooperSurgical, arguing offers did not reflect the business’s long-term value and that the company will now focus on profitable organic growth and share repurchases. His tone was confident but candid, especially on CooperVision, where he said execution at the end of the sales process has lagged and the company is moving faster on sales coverage, marketing, and product launches.

Brian Andrews focused on the financial mechanics: gross margin of 66.7% was down 60 bps from higher costs and FX, while operating margin improved to 26.3% on productivity. He highlighted a discrete tax benefit of about $307 million from the favorable close of HMRC’s examination of the company’s 2021 U.K. IP transfer, which he said should provide meaningful non-GAAP tax benefits for at least 10 more years. He also cited record quarterly free cash flow of $273 million, $445 million of buybacks year to date, leverage below 2x, and a $1 billion increase to the repurchase authorization, leaving about $1.5 billion of capacity.

Analysts pressed management on whether the weaker CooperVision outlook was entirely destocking versus a demand problem. Al White said it was “all destock,” and reiterated that U.S. consumption remained in the mid-single digits and should stay there. Questions also focused on why inventories built up, whether the issue could spill into early 2027, and why EMEA would not be affected; management said they have ring-fenced the issue, that EMEA is more subscription-based, and that the U.S. action should be largely finished in Q4. Analysts also asked about China, where management said MiSight has not gained traction and the market is small, less than 2% of revenues this quarter, with Ortho-K pricing disruption and knockoffs creating a messy backdrop.