Cooper's fiscal Q3 2026 revenue rose 0.6% to $1.07B as contact lens sales stalled on a U.S. destock; a $307M UK tax release lifted GAAP EPS to $2.24, full-year guidance was cut, and a strategic review ended with CooperSurgical kept.
Revenue
$1.1B
+0.6% YoY
Net income
$433M
+340.3% YoY
Diluted EPS
$2.24
+357.1% YoY
Operating margin
20.8%
Overview
CooperCompanies' fiscal Q3 2026 (the three months ended July 31, 2026) looks dramatic on the headline line and flat underneath it. Revenue rose just 0.6% to $1,066.2 million. GAAP net income more than quadrupled, from $98.3 million to $432.8 million, and diluted EPS went from $0.49 to $2.24. Nearly all of that jump came from one accounting item: a $307.2 million one-time ("discrete") tax benefit. The UK tax authority (HMRC) finished its examination of the 2020–21 transfer of CooperVision's intellectual property to a UK subsidiary and accepted Cooper's valuation, so Cooper released a reserve it had held against losing that argument. The benefit drove the quarter's effective tax rate to negative 114.5%, compared with 35.3% a year earlier. Put simply, Cooper recorded a tax credit larger than the pre-tax profit it earned.
With that release removed, net income would have been about $125.6 million (our arithmetic: $432.8M − $307.2M). On management's adjusted ("non-GAAP") basis, which also strips out intangible amortization, litigation and similar items, EPS was $1.15, up 4% from $1.10, according to the company's earnings release (8-K Exhibit 99.1).
The quarter also brought three other developments:
The contact lens business stalled. CooperVision revenue was flat at $717.0 million. Cooper deliberately reduced how much inventory U.S. distributors and retailers hold (the "channel"), and Asia Pacific fell 10%.
Full-year guidance was cut for the second time this fiscal year (details below).
The strategic review ended with no sale. The board looked at selling CooperSurgical and decided to keep it. It raised the buyback authorization from $2 billion to $3 billion instead.
Key metrics
Metric
Fiscal Q3 2026
Fiscal Q3 2025
YoY Change
Revenue
$1,066.2M
Read 0 community reports on The Cooper Companies, or write your own.Write a report
Gross margin is the share of revenue left after the direct cost of making products. Operating margin is the share left after all operating costs, before interest and tax. Non-GAAP figures and free cash flow are company-defined measures from the earnings release. Free cash flow is operating cash flow of $341.7M minus $68.7M of capital spending. The release gives the +66% change but not the year-ago dollar figure ("n/d").
Takeaway: Strip out the $307.2 million tax release and Cooper's underlying story this quarter is 1% organic growth, flat contact lens sales, and a second guidance cut. Most of the profit improvement came from lower costs and from comparing against a year-ago quarter that carried write-offs, not from selling more. The bigger buyback gives investors cash returns, but it doesn't answer the actual question: can CooperVision get back to growth?
CooperVision (contact lenses): flat, with a deliberate U.S. destock
"Organic" growth below means growth after removing currency swings and acquisitions or divestitures. It shows how much more product the business actually sold.
Category
Q3 FY26
Q3 FY25
Reported
Organic (per release)
Toric & multifocal
$363.8M
$358.8M
+1%
+2%
Sphere & other
$353.2M
$359.6M
−2%
−1%
Total CooperVision
$717.0M
$718.4M
0%
0%
Toric lenses correct astigmatism and multifocal lenses correct age-related near-vision loss. "Sphere" lenses correct basic near- or farsightedness. This category also includes MiSight, Cooper's myopia-control lens for children.
According to the 10-Q, toric and multifocal sales grew "primarily through the success of MyDay," Cooper's premium daily disposable lens, partly offset by lower sales of older (legacy hydrogel) lenses. Sphere sales fell mainly because of those same legacy products. The filing doesn't give separate dollar figures for MyDay or MiSight this quarter. Over the nine-month year-to-date period, MiSight and MyDay are cited as the drivers of sphere growth. Currency was close to neutral this quarter (a roughly $2.8M headwind). In the year-ago quarter it had been a roughly $26.8M tailwind, which flatters last year's base.
Region
Q3 FY26
Q3 FY25
Reported
Organic (per release)
Americas
$281.6M
$286.0M
−2%
−2%
EMEA
$309.4M
$292.1M
+6%
+5%
Asia Pacific
$126.0M
$140.3M
−10%
−5%
Americas: The 10-Q attributes the decline to "reductions in U.S. channel inventory." Cooper shipped less so that distributors could run down their stock. Contact lens wearers didn't necessarily buy fewer lenses. CEO Al White said in the release that this destocking "will continue to impact Q4."
EMEA was the only growing region, helped by gains in silicone hydrogel lenses and favorable currency.
Asia Pacific fell on "softness in Japan and China." Half of the 10% reported drop was currency, so the underlying decline was 5%.
CooperVision's operating income still rose 1% to $205.5 million (28.7% margin vs. 28.2%). The 10-Q credits lower operating expenses, mainly headcount reductions, which "more than offset the impact of lower net sales." That kind of improvement comes from cost-cutting, and it can't go on indefinitely without sales growth.
CooperSurgical (fertility and women's health): steadier, and profitable again
Category
Q3 FY26
Q3 FY25
Reported
Organic (per release)
Office & surgical
$208.0M
$204.8M
+2%
+2%
Fertility
$141.2M
$137.1M
+3%
+5%
Total CooperSurgical
$349.2M
$341.9M
+2%
+3%
Fertility growth came from genetic testing, partly offset by lower equipment sales. Office and surgical grew on surgical products. The filing doesn't break out PARAGARD, Cooper's non-hormonal copper IUD, which sits in office and surgical. However, the strategic-review release (8-K Exhibit 99.2) names "a competitive entrant to the non-hormonal IUD market" as one reason buyers' offers for CooperSurgical came in low.
The segment swung from a $4.2 million operating loss to $41.1 million of operating income (11.8% margin). Most of that swing is a comparison effect. The year-ago quarter included inventory and asset write-offs tied to exiting a product line (the release lists $27.2M of "exit of business" charges in Q3 FY25).
Embryo culture media litigation. Over the first nine months, CooperSurgical booked a $272.0 million net litigation expense ($325.8M accrued, less $53.8M of insurance recoveries). The claims relate to its December 2023 recall of three lots of embryo culture media, the liquid used to grow embryos during IVF. That expense is why the segment shows a $157.1 million operating loss year-to-date. In August 2026 Cooper paid $306.8 million to settle "substantially all" claims, $43.8 million of it paid directly by insurance. The 10-Q says the amounts matched what it had accrued.
Strategic review: no sale, bigger buyback
The review began in December 2025. According to Exhibit 99.2, the board evaluated selling CooperSurgical "involving numerous parties" and unanimously decided to keep it, because "offers received were not in the best interest of shareholders." It blamed the IUD competitor and the fertility litigation settlement for a "valuation disconnect." Other outcomes:
The buyback authorization rose to $3.0 billion from $2.0 billion, with about $1.5 billion still unused. Cooper bought back 4.9 million shares for $339.1 million in Q3 at an average $69.16, and $444.7 million year-to-date. Diluted share count fell to 193.4 million from 200.0 million.
Two new independent directors, both former medical device CEOs, joined the board "following constructive engagement with its shareholders."
Operational changes include expanding CooperVision's sales and marketing team, cost-reduction programs, a revised inventory and logistics approach, and faster new product launches.
The review cost money too. Corporate SG&A rose 8% to $24.6 million "primarily due to strategic review costs," which the release puts at $4.3 million.
Balance sheet and cash
Cash generation improved sharply. Nine-month operating cash flow was $785.4 million vs. $548.2 million. Q3 free cash flow reached $273.0 million, which the release calls a record.
Debt of $2,544.2 million (short-term $628.1M + long-term $1,916.1M), roughly flat from $2,505.3 million at October 31, 2025. More of it now comes due soon: a $550 million term loan matures December 17, 2026. $1,328 million remained undrawn on the revolving credit line.
The August settlement payment (about $263 million net of insurance) came after quarter-end, so it isn't in these cash figures yet.
Still open: a UK payroll-tax dispute over the 2014 Sauflon acquisition. A tribunal ruled largely against Cooper in March 2026. Cooper is appealing and estimates a possible loss of £0–£71.7 million plus interest, with nothing accrued.
Nine-month (year-to-date) view
Metric
9M FY26
9M FY25
Change
Revenue
$3,171.8M
$3,027.3M
+4.8%
Operating income
$403.8M
$542.5M
−25.6%
Net income
$485.7M
$290.3M
+67.3%
Diluted EPS (GAAP)
$2.49
$1.45
+71.7%
Diluted EPS (non-GAAP, per release)
$3.46
$2.98
+16.1%
Year-to-date shows the two one-off items pulling in opposite directions. The $272.0 million litigation charge pushed operating income down 26%. The tax release (plus a $40.9M tax benefit on the litigation charge) pushed net income up 67%. Year-to-date revenue growth of 4.8% includes about $53.7 million of favorable currency in CooperVision alone, so Q3's 0.6% is the cleaner read on where the business is now.
Guidance and outlook
Cooper cut its fiscal 2026 outlook again (per the Q3 release, compared with the Q2 release):
FY2026 guidance
After Q2 (June)
After Q3 (September)
Total revenue
$4.285–$4.321B (3.5–4.5% organic)
$4.229–$4.252B (2–3% organic)
CooperVision revenue
$2.883–$2.908B (3.5–4.5% organic)
$2.828–$2.842B (1–2% organic)
CooperSurgical revenue
$1.402–$1.414B (4–5% organic)
$1.401–$1.410B (4–5% organic)
Non-GAAP diluted EPS
$4.58–$4.66
$4.51–$4.55
For fiscal Q4 (quarter ending October 31, 2026), management expects revenue of $1.057–$1.080 billion with 0–2% organic growth. That includes CooperVision at −2% to 0% organic, CooperSurgical at +4% to +6%, and non-GAAP EPS of $1.05–$1.09. Cooper reaffirmed its target of more than $2.2 billion of free cash flow across fiscal 2026–2028.
Our read: The entire guidance cut falls on CooperVision, whose organic growth outlook for the year fell by 2.5 points. CooperSurgical's outlook held. A planned U.S. destock explains some of the weakness, but Asia Pacific's decline and a Q4 guide of flat-to-down contact lens sales point to a slowdown that goes beyond inventory timing, even though the 10-Q's outlook section says management remains "optimistic about the long-term prospects for the worldwide contact lens" market. Adjusted EPS can still rise with a smaller share count, lower interest costs and headcount savings. For the stock to re-rate, though, CooperVision has to show organic growth again once the destocking ends, probably in fiscal 2027. The Q4 print and the FY2027 guidance due with it in early December are the next checkpoints.
Source: The Cooper Companies Form 10-Q for the quarter ended July 31, 2026 (filed September 9, 2026). Organic growth, non-GAAP figures, free cash flow and guidance are from the company's earnings release and strategic-review release furnished as Exhibits 99.1 and 99.2 to its Form 8-K dated September 9, 2026.