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]

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]

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]

Company Overview - The Cooper Companies is a global medical device company with two main segments: CooperVision (CVI) and CooperSurgical (CSI) [11] - CVI focuses on contact lenses, particularly in daily silicone hydrogel lenses, torics, multifocals, and myopia management, with flagship products like MyDay and MiSight [11] - CSI provides products and services in fertility and women's health, including in-vitro fertilization (IVF) solutions and contraceptives [11] Investment Ratings - COO is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B [12] - The Value Style Score is also B, supported by a forward P/E ratio of 18.54, indicating attractive valuation metrics for value investors [12] - The Zacks Consensus Estimate for fiscal 2026 has increased to $4.39 per share, with one analyst revising their earnings estimate upwards in the last 60 days [12] Performance Metrics - COO has an average earnings surprise of +2.4%, suggesting a positive trend in earnings performance [12] - With a solid Zacks Rank and strong Value and VGM Style Scores, COO is recommended for investors' consideration [13]

Financial Data and Key Metrics Changes - Consolidated revenues increased by 4.6% year over year, reaching a record of $1.065 billion, with organic growth of 3.4% [9][19] - Non-GAAP earnings per share (EPS) grew by 11% to $1.15, marking the eighth consecutive quarter of beating consensus earnings expectations [7][19] - Free cash flow for Q4 was reported at $150 million, exceeding expectations, with a target of over $2.2 billion in free cash flow from fiscal 2026 to 2028 [7][23] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $710 million, up 4.9% year over year, with organic growth of 3.2% [10][19] - CooperSurgical achieved quarterly revenue of $356 million, up 4% or 3.9% organically, driven by solid execution [14][19] - MyDay lenses showed strong growth, particularly in toric and multifocal categories, while clariti lenses experienced a decline of approximately 2% [10][28] Market Data and Key Metrics Changes - The Americas region grew by 5%, driven by daily silicone hydrogel lenses, while EMEA grew by 3% [11] - Asia-Pacific remained flat, with a significant 28% decline in China attributed to weakness in low-margin e-commerce channels [11][50] - The overall contact lens market is trending towards premium offerings, benefiting the MyDay portfolio [10][11] Company Strategy and Development Direction - The company is focused on consistent market share gains for CooperVision, with an emphasis on the MyDay Premium Daily Silicone Hydrogel Lens portfolio [6][9] - A strategic review has been initiated to explore opportunities for unlocking long-term shareholder value, including potential separation of business units [9][38][79] - The board has authorized an increase in the share repurchase plan to $2 billion, reinforcing the commitment to returning capital to shareholders [8][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2026, expecting strong revenue growth driven by MyDay sales and new private label contracts [17][53] - The company anticipates a conservative approach to guidance, particularly in the fertility segment, while remaining optimistic about long-term growth in that market [15][56] - Management highlighted the importance of maintaining fiscal responsibility and not chasing revenues at all costs, particularly in challenging markets like China [50][51] Other Important Information - The company has successfully remediated material weaknesses related to IT controls from fiscal 2024 [24] - Significant cost savings from recent reorganization efforts are expected to enhance profitability and cash flow [20][23] Q&A Session Summary Question: Clariti product line performance - Clariti was down a couple of percent this quarter, approaching $400 million in annualized revenue, with ongoing efforts to reposition the product [27][28] Question: Strategic review timeline and thoughts on separation - A strategic review is underway, with updates expected in the next earnings call, and management's position on potential separation remains unchanged [37][38][41] Question: Market growth assumptions for 2026 - The market is expected to grow at 4%-5%, with pricing power anticipated to remain stable [43][45] Question: Asia-Pacific market dynamics - Asia-Pacific faced challenges due to low-margin e-commerce channels, but management expects less detriment in fiscal 2026 [49][50] Question: Free cash flow outlook - The increase in free cash flow is driven by consistent performance and reduced capital expenditures, with expectations of over $2.2 billion in free cash flow from fiscal 2026 to 2028 [56][59] Question: Product pipeline and innovation - The company is excited about upcoming product launches, including MyDay and MiSight, which are expected to drive growth [90][91]

Financial Data and Key Metrics Changes - Consolidated revenues increased by 4.6% year over year, reaching a record of $1.065 billion, with organic growth of 3.4% [8][18] - Non-GAAP earnings per share (EPS) grew by 11% to $1.15, marking the eighth consecutive quarter of beating consensus earnings expectations [5][18] - Free cash flow for Q4 was strong at $150 million, with a total fiscal year repurchase of nearly $300 million, representing about two-thirds of free cash flow [5][19] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $710 million, up 4.9% year over year, with organic growth of 3.2%, driven by improved availability of MyDay lenses [9][10] - CooperSurgical achieved quarterly revenue of $356 million, up 4% or 3.9% organically, with growth in fertility and surgical segments [14][15] Market Data and Key Metrics Changes - The Americas region grew by 5%, while EMEA grew by 3%, slightly below expectations due to market weakness in some countries [10][14] - Asia-Pacific was flat, primarily due to a 28% decline in China, attributed to weakness in low-margin e-commerce channels [10][12] Company Strategy and Development Direction - The company is focused on delivering consistent market share gains for CooperVision, with an emphasis on the MyDay Premium Daily Silicone Hydrogel Lens portfolio [4][6] - A formal strategic review has been initiated to explore opportunities for unlocking long-term shareholder value, including potential separation of business units [8][31][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2026, expecting strong revenue growth driven by MyDay sales and new private label contracts [39][60] - The company anticipates a conservative approach to guidance, particularly in the fertility segment, while remaining optimistic about long-term growth prospects [15][60] Other Important Information - The board authorized an increase in the share repurchase plan to $2 billion, reinforcing the commitment to returning capital to shareholders [6][19] - The company has successfully remediated material weaknesses related to IT controls from fiscal 2024 [24] Q&A Session Summary Question: Clariti product line performance - Clariti was down a couple of percent this quarter, approaching $400 million in annualized revenue, with ongoing efforts to reposition the product line [25][26] Question: Strategic review process - A strategic review is underway, with updates expected in the next earnings call, focusing on driving long-term shareholder value [30][31] Question: Market growth assumptions - The market is expected to grow at 4%-5% in fiscal 2026, with pricing power remaining stable [33][34] Question: Asia-Pacific market dynamics - The company faced challenges in Asia-Pacific, particularly in low-margin e-commerce channels, but expects less detriment in fiscal 2026 [37][38] Question: Free cash flow outlook - The increase in free cash flow is attributed to consistent performance and reduced capital expenditures, with expectations of over $2.2 billion in free cash flow from fiscal 2026 to 2028 [23][42] Question: Paragard product expectations - Guidance for Paragard includes conservatism due to potential competitive launches, with expectations for flat to low single-digit growth [55] Question: Pipeline and product launches - The company is excited about upcoming product launches, including MyDay and MiSight, which are expected to drive growth [58][59]

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][4][5] - Despite long-term growth opportunities, near-term performance is challenged by channel volatility, private-label transition risks, softness in the Asia-Pacific region, and tariff/foreign exchange pressures [1][10][11] Financial Performance - COO's shares have declined by 27.5% year-to-date, contrasting with a 2.8% decline in the industry and a 14.4% increase in the S&P 500 Index [2] - The company has a market capitalization of $13.55 billion, with an estimated bottom line improvement of 9.3% over the next five years [2] - COO's earnings have beaten estimates in three of the last four quarters, with an average surprise of 2.51% [2] Growth Drivers - Premium product migration is a key growth driver, with CooperVision shifting users from lower-margin clariti lenses to premium silicone hydrogel daily lenses, particularly the MyDay family, which is experiencing double-digit growth [4] - MiSight, the only FDA-approved daily lens to slow myopia progression, presents a multibillion-dollar growth opportunity, supported by recurring revenues from annual fits and upcoming launches in various regions [5][6] - CooperSurgical diversifies COO's revenue streams by focusing on fertility and women's health, targeting a growing market due to later maternal age and rising IVF demand [7] Challenges - The transition from clariti to MyDay has led to near-term revenue volatility, with organic growth dropping to nearly 2% despite solid demand [8] - Execution risks include potential rollout delays, slower adoption of fitting sets, and capacity strains, which could lead to backorders and affect revenue consistency [9] - The Asia-Pacific region, particularly China, poses growth challenges due to a significant decline in e-commerce sales and increased local competition [10] Outlook - The Zacks Consensus Estimate for fiscal 2025 revenues is $4.09 billion, indicating a growth of 5.1% from the previous year, with adjusted EPS expected to improve by 10.8% [12] - COO anticipates a $4 million tariff impact on fiscal 2025 COGS and a 3% EPS headwind in fiscal 2026 if tariffs remain unchanged, alongside exposure to global supply chain shifts and foreign exchange fluctuations [11]