Stryker Corporation

Q2 organic sales growth was 9%, versus a double-digit comparable in Q2 2025. Adjusted EPS was $3.69, up $0.56 or 17.9% year over year. Adjusted gross margin was 66%, up 60 basis points, and adjusted operating margin was 27.4% of sales, up 170 basis points. Foreign currency added 0.4% to sales and pricing was flat; adjusted other income and expense was $101 million, and the adjusted effective tax rate was 16.5%. Full-year 2026 guidance was narrowed to organic net sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10. Management also reiterated full-year adjusted other income and expense of about $420 million and an effective tax rate of 15% to 16%.

Kevin Lobo said the quarter showed Stryker’s broad portfolio strength and resilience as the company continued recovering from the cybersecurity incident. He emphasized strong demand in capital products, a healthy procedure environment, and a growing pipeline of launches including Mako RPS, Triathlon Gold, Encompass total ankle, Pangaea trauma plating, and Sonopet 3. His tone was confident, with repeated comments that the company has clear visibility into the business and is positioned for a strong second half.

Preston Wells highlighted that Q2 organic sales growth was 9% and adjusted EPS reached $3.69, up $0.56 from last year. He cited 66% adjusted gross margin, up 60 basis points, and 27.4% adjusted operating margin, up 170 basis points, driven by gross margin improvement, lower SG&A, and a net tariff benefit. He also pointed to $3.5 billion of cash and marketable securities, $1.8 billion of year-to-date operating cash flow, M&A as the top capital allocation priority, and a plan to resume share repurchases this quarter; he noted about $1 billion of board-approved repurchase capacity available.

Analysts focused heavily on whether the second-half guidance implied a sharp sales acceleration and how much of Q2 was underlying momentum versus catch-up from Q1. Management said the back half should benefit from elevated capital backlog, production ramping, and rescheduled procedures, but declined to quantify the exact mix. Questions also centered on the peripheral vascular supply disruption, with management saying the issue was specific to one Inari plant, created significant backorders and lost sales, and should be manageable by end of Q3; they expect recovery as the sales force and manufacturing stabilize.