The Cooper Companies Inc (COO) Q2 2025 Earnings Call Highlights: Strong Revenue Growth Amid ...
CooperVision Revenue: $670 million, up 5% or 7% organically.
CooperSurgical Revenue: $333 million, up 8% or 7% organically.
Non-GAAP Earnings: $0.96, up 14% year-over-year.
Gross Margin: 68%, up from 67.3%.
Operating Margin: 24.9%, with operating income up 11%.
Free Cash Flow: $18 million, with CapEx of $78 million.
Net Debt: Increased slightly to $2.47 billion.
Share Repurchase: Approximately 537,000 shares for $40.6 million.
Revenue Guidance: $4.11 billion to $4.15 billion for fiscal 2025, up 5.5% to 6.5%.
Non-GAAP EPS Guidance: $4.05 to $4.11, growth of 10% to 11.5% year-over-year.
Free Cash Flow Guidance: $350 million to $400 million for fiscal 2025.
Warning! GuruFocus has detected 2 Warning Sign with COO.
Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
The Cooper Companies Inc (NASDAQ:COO) reported a solid quarter with consolidated organic revenue growth of 7%, driven by double-digit growth in daily silicone hydrogel lenses and the office and surgical portfolio.
Margins improved significantly, with non-GAAP earnings up 14% year-over-year, demonstrating operational improvements and OpEx leverage.
The myopia management portfolio grew 19%, with MiSight up 35%, indicating strong demand and successful implementation of a new pricing model.
CooperSurgical reported revenues of $333 million, up 8% or 7% organically, driven by success in surgical medical devices and labor and delivery portfolio.
The company raised its revenue guidance at the midpoint, reflecting solid Q2 performance and positive impact from updated currency rates.
The Cooper Companies Inc (NASDAQ:COO) is facing a more complex global operating environment, with pressures from channel inventory and market growth assumptions.
Fertility revenues were softer than expected, particularly in Asia Pac, due to market softness and fertility clinics managing cash tighter.
The company reduced its market growth expectations for contact lenses and fertility, reflecting a more conservative outlook.
There is ongoing pressure from tariffs, with an expected negative impact of roughly $4 million to cost of goods this year.
The company anticipates a mid-teens decline in PARAGARD sales in fiscal Q3, following channel fill-driven growth in the first half of the year.
Q: Can you provide insights into the contact lens market dynamics, particularly regarding channel inventory and consumer behavior? A: Albert White, President and CEO, explained that channel inventory fluctuations are impacting reported growth rates. Consumers are purchasing smaller supplies, such as three-month instead of twelve-month supplies, which affects revenue despite strong fitting activity. This trend is expected to continue, putting pressure on inventory levels throughout the year.
Q: What factors contributed to the lowered market growth assumption for Vision Care this year? A: Albert White noted that the market is returning to its historical growth range of 4% to 6%, down from the post-COVID highs. The adjustment reflects general market softness rather than specific issues, with pricing remaining sound and fitting activity still robust.
Q: How is the fertility market performing, and what are the expectations moving forward? A: Albert White highlighted that fertility growth was softer than expected, particularly in Asia Pacific due to market softness and consumer pressure. The industry is expected to grow in the low single digits this year, with some improvement anticipated in the latter half of the year.
Q: Can you elaborate on the impact of tariffs and how Cooper Companies plans to mitigate them? A: Brian Andrews, CFO, stated that tariffs are expected to negatively impact costs by approximately $4 million this year. The company is evaluating mitigation strategies, including potential price increases and adjustments to supply chain flows, to offset the impact.
Q: What is driving the decision to implement a free trial program for MiSight, and how does it affect growth expectations? A: Albert White explained that the free trial program aims to reduce initial fitting barriers for MiSight, as the upfront cost is not the primary barrier. The program is expected to boost fitting activity and accelerate growth, with MiSight projected to achieve over 40% growth in Q4.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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