Mettler-Toledo International Inc.

Second quarter sales were $1 billion, up 7% in U.S. dollars; local-currency sales grew 6%, versus prior guidance of about 3%, and organic local-currency sales grew 4%. Adjusted gross margin was 59.3%, up 30 basis points; adjusted operating margin was 29.3%, up 50 basis points; and adjusted EPS was $11.46, up 14% year over year. Reported EPS was $11.55 versus $9.76 a year ago. On a regional basis, organic sales grew 1% in the Americas, 4% in Europe, and 9% in Asia/Rest of World, including 9% growth in China. By segment, organic sales grew 4% in Laboratory, 3% in Industrial, 11% in Food Retail, and service revenue grew 9% or 7% organically. For the full year 2026, management raised local-currency sales growth guidance to approximately 4% to 5% from about 4%, with organic growth of 3% to 4%. Adjusted EPS is now expected to be $47.15 to $47.50, implying 10% to 11% growth, or 11% to 12% excluding currency. For Q3 2026, the company expects local-currency sales growth of about 4% and adjusted EPS of $12.00 to $12.15. Free cash flow is expected to be about $900 million in 2026, and share repurchases are now expected to increase to $875 million for the full year.

Patrick Kaltenbach said the quarter reflected stronger-than-expected organic sales growth across the portfolio, with particularly good performance in China and emerging markets. He emphasized that improved market conditions, the Spinnaker sales and marketing program, and innovation are helping the company capture growth in automation, digitalization, and onshoring-related investments. His tone was constructive and confident, with repeated references to strong execution, market-share gains, and optimism that conditions should gradually improve.

Shawn Vadala highlighted several one-time tariff-related items, including a $52 million gross benefit from IEEPA tariff refunds that benefited cost of sales and a $28 million related customer refund that reduced reported net sales by 3%; he said results discussed on the call exclude both items. He cited adjusted gross margin of 59.3% (+30 bps), adjusted operating margin of 29.3% (+50 bps), adjusted EPS of $11.46 (+14%), and year-to-date adjusted free cash flow of $367 million, which was affected by $55 million of higher tax payments. For 2026, he guided to about $900 million in free cash flow, $67 million of interest expense, a 19% tax rate before discrete items, roughly $78 million of amortization, and $875 million of share repurchases.

Analysts focused on the strength and durability of China, the rebound in Lab, the timing-driven softness in Product Inspection, and what assumptions changed in the back half guidance. Management said China’s Q2 growth was led by Industrial, with Lab improving more gradually, and they now expect China to remain high single digit for Q3 and full year. On Product Inspection, management said Q2 was lighter because of project timing, but expects mid-single-digit growth in Q3 and high-single-digit growth for the full year. Questions also probed pricing, margins, and reshoring; management said pricing realization was around 3% in Q2, the full-year price assumption is still around 2% long term, and reshoring activity is still early but supported by RFQs and incremental biopharma investment plans.