Company Overview - The Cooper Companies operates as a global medical device company with two main segments: CooperVision (CVI) and CooperSurgical (CSI) [11] - CVI specializes in contact lenses, particularly in daily silicone hydrogel lenses, torics, multifocals, and myopia management, with flagship products like MyDay and MiSight [11] - CSI focuses on fertility and women's health, providing in-vitro fertilization (IVF) solutions, contraceptives, and surgical devices [11] Investment Potential - COO is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating strong overall potential [12] - The company is highlighted as a top pick for growth investors, with a Growth Style Score of B and a forecasted year-over-year earnings growth of 11.7% for the current fiscal year [12] - Recent analyst activity shows five analysts have revised their earnings estimates higher for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.10 to $4.60 per share [12] - COO has an average earnings surprise of +4.1%, further indicating its potential for positive performance [12] Summary of Style Scores - The VGM Score combines value, growth, and momentum characteristics, making it a crucial indicator alongside the Zacks Rank [6] - A stock with a strong Zacks Rank and favorable Style Scores (A or B) is more likely to succeed, which applies to COO's current ratings [9][10]

Core Insights - The Cooper Companies, Inc. (COO) reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.10, a 19.6% increase year over year, surpassing the Zacks Consensus Estimate of $1.03 by 6.8% [2] - Revenues reached $1.02 billion, reflecting a 6% year-over-year increase on a reported basis and a 3% organic growth, aligning with the Zacks Consensus Estimate [3] - Despite strong earnings, COO's shares fell 3.6% in after-hours trading on March 5, with a 16.6% increase in the past six months compared to the industry's 21.2% rise [4] Revenue Breakdown - COO operates through two segments: CooperVision (CVI) and CooperSurgical (CSI) [5] - CVI segment revenues were $695.1 million, an 8% increase year over year on a reported basis and 3% at constant exchange rates (CER) [5] - Strong sales of MyDay and MiSight lenses contributed to CVI's growth, with MyDay lenses maintaining a double-digit growth rate [6][8] - CSI segment revenues totaled $329 million, up 3% on a reported basis, driven by strong global genomics performance [13] Geographic Performance - Americas' revenues were $289 million, up 7% year over year, driven by demand for daily silicone hydrogel lenses [11] - EMEA revenues reached $282.3 million, a 15% increase year over year, maintaining the company's leadership in the region [11] - Asia Pacific revenues fell 4% year over year to $123.8 million, primarily due to declining sales of older hydrogel lenses in Japan [12] Margin and Cost Analysis - Adjusted gross profit rose 5.3% to $697.7 million, but the adjusted gross margin contracted by nearly 100 basis points to 68% [16] - Selling, general and administrative expenses increased by 0.6% to $390.2 million, while research and development expenses rose 8.8% to $44.3 million [17] - Adjusted operating profit increased by 13.8% to $275.4 million, with the adjusted operating margin expanding by 200 basis points to 27% [17] Financial Position and Guidance - COO ended the first quarter with cash and cash equivalents of $124.9 million, up from $110.6 million at the end of the previous quarter [18] - The company raised its fiscal 2026 revenue outlook to a range of $4,306-$4,346 million, indicating an organic improvement of 4.5-5.5% from the prior year [19] - Adjusted EPS guidance for the fiscal year is now expected in the range of $4.58-$4.66, up from the previous guidance of $4.45-$4.60 [21] Future Growth Drivers - Continued expansion of premium lenses, particularly MyDay and MiSight, is expected to drive growth in the CVI segment [23] - The company is benefiting from new private-label contracts and improved commercial momentum in the Americas and EMEA [23] - Operational efficiencies from last year's reorganization and broader use of AI-driven automation are anticipated to sustain margin expansion [23]

Core Insights - The Cooper Companies reported a strong start to fiscal year 2026, driven by product launches, high profitability, and robust cash flow [2] Group 1: Financial Performance - The company raised its earnings per share (EPS) and free cash flow guidance for 2026, reflecting positive momentum from its MyDay and MiSight product lines [2] - CEO Albert White highlighted consistent market share gains for CooperVision as a key aspect of the company's performance [2] Group 2: Strategic Priorities - Management emphasized progress on three strategic priorities, which include operational excellence and maintaining strong market positions [2]

Financial Data and Key Metrics Changes - Consolidated revenues were $1.024 billion, up 6.2% year-over-year and up 2.9% organically [11][22] - Non-GAAP earnings grew 20% to $1.10 per share, with free cash flow at $159 million [11][23] - Operating margins improved significantly, with a gross margin of 68.1% [22] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $695 million, up 7.6% or 3.3% organically, with strong growth in daily silicone hydrogel lenses [11][12] - CooperSurgical delivered revenue of $329 million, up 3.3% or 2.2% organically, driven by strong performance in the fertility segment [11][18] - Daily silicone hydrogel lenses grew 7%, led by double-digit growth in MyDay [11][14] Market Data and Key Metrics Changes - The Americas grew 6%, while EMEA grew 4%, strengthening market positions [12] - Asia Pac declined 4%, primarily due to softness in Japan related to older hydrogel products [12][13] - The company is optimistic about returning to growth in Asia Pac by fiscal Q3 due to new product launches [13][36] Company Strategy and Development Direction - The company is focused on consistent market share gains, operational excellence, and disciplined capital allocation [7][9] - There is a commitment to investing in sales and marketing initiatives to support product launches and strategic initiatives [9][10] - The strategic review process is ongoing, with a focus on maximizing long-term shareholder value [10][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to the fiscal year, with expectations for continued growth in earnings and free cash flow [7][9] - The company anticipates challenges in Asia Pac but expects to overcome them with new product launches and improved execution [36][80] - The fertility market is showing signs of recovery, with improving IVF cycles in the U.S. and Europe [19][104] Other Important Information - The company repurchased $92 million in stock during the quarter and reduced net debt to $2.4 billion [24] - Guidance for fiscal 2026 has been raised, with expected consolidated revenues of $4.3 billion to $4.35 billion [25][26] Q&A Session Summary Question: Can you reconcile the 10% calendar Q4 number versus the last few quarters? - The difference is attributed to shipment timing, with a weak November and December followed by a strong January [31] Question: How is the plan to return to above-market growth progressing? - The Americas and EMEA are performing well, but Asia Pac needs improvement, particularly in Japan [34][36] Question: What is the exposure to the Middle East and potential impacts from the war? - The Middle East accounts for about 2% of sales, and while it could impact fertility business, overall momentum remains positive [40][41] Question: How should we think about operating margins and tariffs? - Durable savings from synergies and disciplined expense management are expected to continue, with tariffs factored into guidance [42][44] Question: What is the status of supply dynamics and new contracts? - Supply constraints have been resolved, allowing for the winning of new contracts across all regions [68][70] Question: What are the dynamics in the fertility market? - The fertility market is stabilizing with improving IVF cycles and renewed interest in new technologies [104]

Financial Data and Key Metrics Changes - Consolidated revenues were $1.024 billion, up 6.2% year-over-year and up 2.9% organically [11][22] - Non-GAAP earnings grew 20% to $1.10 per share, with free cash flow at $159 million [11][23] - Operating margins improved significantly, with operating income increasing 13.9% to a 26.9% margin [22] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $695 million, up 7.6% or 3.3% organically, with strong growth in daily silicone hydrogel lenses [11][12] - CooperSurgical delivered revenue of $329 million, up 3.3% or 2.2% organically, driven by strong performance in the fertility segment [11][18] - Daily silicone hydrogel lenses grew 7%, with MyDay leading the growth at double digits [11][14] Market Data and Key Metrics Changes - The Americas grew 6%, while EMEA strengthened with a 4% increase; Asia Pac declined 4% due to softness in Japan [12][18] - The company gained market share for the 18th consecutive year, with CooperVision growing 10% in calendar Q4 compared to a market growth of 6% [17][18] Company Strategy and Development Direction - The company is focused on consistent market share gains, operational excellence, and disciplined capital allocation [7][9] - There is an ongoing strategic review to maximize long-term shareholder value, with updates to be provided when available [10][88] - Investments in sales and marketing initiatives are prioritized to support product launches and strategic initiatives [9][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in Asia Pac by Q3, despite current challenges [36][80] - The fertility market is showing signs of recovery, with improving IVF cycles in the U.S. and Europe [19][104] - The company anticipates steady improvement in free cash flow and operational performance for fiscal 2026 [26][27] Other Important Information - The company repurchased $92 million in stock during the quarter and reduced net debt to $2.4 billion [24][26] - The effective tax rate was reported at 15.1%, with interest expense at $22.4 million [23][24] Q&A Session Summary Question: Can you reconcile the 10% calendar Q4 number versus the last few quarters? - Management explained that the strong Q4 was due to a weak November and December followed by a strong January [31] Question: How is the plan to return to above-market growth progressing? - Management noted good momentum in the Americas and EMEA, but challenges remain in Asia Pac, particularly in Japan [34][36] Question: What is the exposure to the Middle East and potential impacts from the war? - The Middle East accounts for about 2% of sales, with potential impacts on fertility business but overall momentum remains positive [40][41] Question: How should we think about operating margins and tariffs? - Management indicated durable savings from synergies and a disciplined approach to expenses, with tariffs expected to remain at $24 million for the year [42][44] Question: Can you discuss the competitive landscape and new fit activity? - Management reported stable new fit activity, with positive indicators for future growth [50][51] Question: What are the dynamics of the private label contracts? - Private label revenues are slightly above a third of total revenues, with expectations for continued success in winning contracts [94] Question: What is the outlook for MiSight in Japan? - Management expressed optimism about MiSight's reception in Japan, with significant opportunities due to high myopia rates among children [96][97]

Financial Data and Key Metrics Changes - Consolidated revenues were $1.024 billion, up 6.2% year-over-year and up 2.9% organically [9][19] - Non-GAAP earnings grew 20% to $1.10 per share, with free cash flow at $159 million [9][20] - Operating margins improved significantly, with gross margin at 68.1% [19] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $695 million, up 7.6% or 3.3% organically, with strong growth in daily silicone hydrogel lenses [9][10] - CooperSurgical delivered revenue of $329 million, up 3.3% or 2.2% organically, driven by strong performance in fertility and consumables [9][16] Market Data and Key Metrics Changes - Regionally, the Americas grew 6%, while Asia Pac declined 4% due to softness in Japan [10][19] - EMEA showed excellent commercial momentum, contributing to overall growth [4][10] Company Strategy and Development Direction - The company is focused on consistent market share gains, operational excellence, and disciplined capital allocation [4][6] - There is an emphasis on product launches, particularly the MyDay daily silicone hydrogel portfolio, and increasing sales and marketing investments [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in Asia Pac by Q3, despite current challenges [10][33] - The fertility market is showing signs of recovery, with improving IVF cycles in the U.S. and Europe [17][98] Other Important Information - The company is raising guidance for both earnings and free cash flow for the fiscal year 2026 [6][22] - A strategic review is ongoing, with active engagement from the board and advisors [8][84] Q&A Session Summary Question: Reconciliation of calendar Q4 number versus previous quarters - Management explained that the strong calendar Q4 was due to a weak November and December followed by a strong January [26][27] Question: Update on MyDay and Clarity transition - Management noted good traction in the Americas and EMEA, but challenges remain in Asia Pac, particularly Japan [30][31] Question: Impact of the Middle East on business - The Middle East accounts for about 2% of sales, with potential impacts on fertility business due to current conditions [35][36] Question: Future pricing dynamics and list price increases - Management is optimistic about pricing stability and believes the market can absorb more than one price increase per year [48][50] Question: Update on supply dynamics and new contracts - Management confirmed that supply constraints have been resolved, allowing for new contract wins across all regions [62][66] Question: Insights on MiSight and competitive landscape - Management sees increased interest in myopia control, which is beneficial for MiSight, and expects continued growth in the fertility market [96][98]

Core Viewpoint - The Cooper Companies, Inc. is expected to report its first-quarter fiscal 2026 results on March 05, with anticipated revenue growth of 6.3% year-over-year and earnings per share (EPS) growth of 12% [1][2][10]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for revenues is set at $1.03 billion, reflecting a 6.3% increase from the previous year [2]. - The consensus estimate for earnings is $1.03 per share, indicating a 12% improvement compared to the same quarter last year [2]. - The company has a history of beating earnings estimates, with a 3.60% beat in the last reported quarter and an average surprise of 2.41% over the last four quarters [1][3]. Group 2: Market Dynamics and Growth Drivers - The first-quarter results are likely to show steady growth in the contact lens market, despite ongoing mix headwinds and a cautious fertility environment [3]. - CooperVision is expected to remain a key growth driver, with strong performance from MyDay daily silicone hydrogel lenses and MiSight myopia control lenses [6][10]. - Private label contract wins in the U.S. and Europe are anticipated to contribute positively to revenue growth, although challenges persist in the Asia-Pacific region, particularly in China [7][10]. Group 3: Operational Insights - Management has guided for 3-4% consolidated organic growth for the upcoming quarter, with expectations of operating margin expansion despite lower gross margins due to tariffs and product mix [4]. - Gross margin pressure is expected to continue, with a decline noted in the previous quarter to 66.2% due to tariffs and product mix [5]. - The company is implementing operational restructuring expected to yield approximately $50 million in annual pretax savings [4]. Group 4: Segment Performance - CooperSurgical's revenue growth in the fertility segment is projected to be modest, with a 1% increase against a tough prior-year comparison [11][12]. - PARAGARD, a product within CooperSurgical, showed a rebound with 16% growth in the fourth quarter, and a similar trend is expected to continue [12].

Summary of The Cooper Companies FY Conference Call Company Overview - **Company**: The Cooper Companies (NasdaqGS: COO) - **Founded**: 1958 - **S&P 500 Inclusion**: Since 2016 - **Business Units**: - **CooperVision**: Leading contact lens company, number one in wearers and number two in revenue - **CooperSurgical**: Focused on fertility and women's healthcare, leading in non-pharma medical devices [1][2] Key Financial Metrics - **Employees**: Over 15,000 globally - **Product Users**: Over 50 million, with 42 million annual contact lens wearers - **Revenue Composition**: CooperVision accounts for about two-thirds of consolidated revenues - **Historical Revenue Growth**: 10-year growth rate of 8.6% [2][3] Growth Insights - **CooperVision Growth**: Primarily organic growth at 6.3%, with the contact lens market growing mid-single digits annually - **CooperSurgical Growth**: Approximately 16%, driven by acquisitions [3][4] - **Market Trends**: - Contact lens market growth projected at 4%-6% annually - Fertility market growth in mid-single digits, with potential for double-digit growth in the past [4][13] Financial Guidance - **Non-GAAP EPS Guidance**: $1.02-$1.04 for Q1 and $4.45-$4.60 for the full year - **Free Cash Flow Guidance**: $5.75-$6.25 billion, with expectations of $2.2 billion in free cash flow over the next fiscal year [5][6] Strategic Priorities - **Focus on Organic Growth**: Transitioning from heavy investment to driving organic growth and operational efficiency - **Cost Management**: Significant reorganization to reduce costs and improve operational efficiency [7][9] - **AI Integration**: Utilizing AI for inventory optimization and management [10] Market Dynamics - **Contact Lens Market**: - 35% of the global population is myopic, projected to reach 50% by 2050 - Major competitors: J&J (36% market share), CooperVision (27%), Alcon (25%) [13][14] - Shift towards daily lenses driving revenue growth, with daily wearers generating 2.5 times more revenue than monthly wearers [15][16] - **Fertility Market**: - Global market valued at approximately $3 billion, with one in six experiencing infertility - Growth driven by delayed childbirth and increasing insurance support for fertility treatments [26][27] Product Innovations - **New Product Launches**: - MiSight: FDA-approved contact lens for myopia management - MyDay MiSight: Daily silicone hydrogel lens with myopia control technology [21][22][24] - **Expansion Plans**: Launching new products in Europe and Asia, including MyDay Energys and MyDay Multifocal [24][25] Capital Allocation Strategy - **Share Repurchase Program**: Increased from $1 billion to $2 billion, with plans to consistently allocate a portion of free cash flow to buybacks [11][33] - **Investment Focus**: Transitioning from acquisitions to leveraging past investments for growth and shareholder value [11][33] Market Outlook - **2026 Guidance**: Expectation of improved performance in both CooperVision and CooperSurgical, with a focus on regaining traditional growth rates in the fertility market [45][46] - **Regional Performance**: Strong consumer behavior in the Americas, with challenges in Asia-Pac but expected improvements [47][48] Strategic Review - **Ongoing Evaluation**: Conducting a strategic review to assess the potential separation of CooperVision and CooperSurgical, considering synergies and market positioning [36][38][39] Conclusion - **Overall Sentiment**: Positive outlook on growth opportunities in both contact lens and fertility markets, with a strong focus on operational efficiency and shareholder value creation [30][33]

Company Overview - CooperCompanies is a leading global medical device company with FY25 revenue of $41 billion[7] - The company's products are sold in more than 130 countries and it has over 15000 employees in 45+ countries[7] - CooperCompanies operates through two business units: CooperVision (CVI) and CooperSurgical (CSI)[7] Financial Performance and Guidance - CooperCompanies' total revenue has more than doubled in the last decade, with a CAGR of 86% from 2015 to 2025[9] - The company provides FY26 revenue guidance of $4299 - $4338 million, with organic growth of 45% - 55%[10] - CooperVision's FY26 revenue guidance is $2900 - $2925 million, with organic growth of 45% - 55%[10] - CooperSurgical's FY26 revenue guidance is $1399 - $1413 million, with organic growth of 4% - 5%[10] - Non-GAAP EPS guidance for FY26 is $445 - $460[10] - The company targets free cash flow of $575 - $625 million for FY26[10] Market Position and Strategy - CooperVision is the 1 contact lens company in the world in terms of wearers[22] - The global soft contact lens market is an $11 billion market growing at 4-5% annually[16, 18] - CooperSurgical is a leading fertility company in the medical device industry, addressing a ~$3 billion global market with 4-6% annual growth[34]

Core Insights - The Cooper Companies, Inc. (COO) is experiencing growth driven by CooperVision's premium lens migration and MiSight's leadership in myopia management, alongside CooperSurgical's women's health and fertility portfolio [1] - Near-term performance is impacted by channel volatility, private-label transition risks, softness in the Asia-Pacific region, and tariff/foreign exchange pressures, although long-term opportunities remain robust [1] Financial Performance - COO's shares have increased by 15.5% over the past six months, outperforming the industry growth of 12.9% and the S&P 500 Index's increase of 14.5% [2] - The company has a market capitalization of $16.19 billion and is expected to see a 7.8% improvement in its bottom line over the next five years, with earnings beating estimates in three of the last four quarters [4] Growth Drivers - CooperVision's MyDay daily silicone hydrogel franchise is a key growth engine, with strong global rollout and uptake in various lens types, supported by expanding private-label contracts [5] - Capacity constraints in Asia-Pacific have been resolved, allowing for improved execution and higher revenues per patient, despite lower gross margins from daily silicone hydrogel lenses [6] - MiSight, the only FDA-approved contact lens for myopia control, reported 37% growth in Q4 and nearly $104 million in sales for fiscal 2025, with management guiding for 20-25% growth in fiscal 2026 [7] Operational Improvements - A recent reorganization is expected to yield nearly $50 million in annual pretax savings starting in fiscal 2026, enhancing cash flow and operational efficiency [10] - Operating margins expanded to 27% in Q4, with further improvements anticipated, while free cash flow reached $150 million, raising the cumulative target for fiscal 2026-2028 to over $2.2 billion [11] Capital Allocation - The company emphasizes shareholder returns, having repurchased nearly $300 million of stock in fiscal 2025, with plans for similar allocations in fiscal 2026 supported by a $2 billion authorization [12] - Free cash flow is projected to rise to $575-$625 million in fiscal 2026 as capital expenditures normalize, improving net leverage to 1.76x [12] Challenges - Gross margin pressures persist due to the mix shift towards lower-margin daily silicone hydrogel lenses and ongoing tariff impacts, with management guiding for further declines in fiscal 2026 [13][14] - The Asia-Pacific region, particularly China, saw a 28% decline in Q4 due to weaknesses in low-margin e-commerce channels, with management prioritizing profitability over volume [15] - Fertility demand in the CooperSurgical segment remains sensitive to consumer spending, leading to conservative guidance for the next fiscal year despite early signs of improvement [16] Revenue Estimates - The Zacks Consensus Estimate for fiscal 2026 revenues is $4.31 billion, reflecting a 5.3% growth from the previous year, with adjusted EPS expected to improve by 9.5% to $4.51 [17]