Cooper Companies (COO) Stock Plunges 15% on Scrapped Sale and Revenue Miss

Key Takeaways

• Shares of Cooper Companies plummeted over 15% following the company’s decision to retain its CooperSurgical division, dashing investor expectations of a potential divestiture.
• Third-quarter revenue reached $1.07 billion, falling short of Wall Street’s $1.10 billion projection.
• The company reduced its full-year adjusted earnings per share outlook to $4.51-$4.55, compared to the previous range of $4.58-$4.66.
• Annual revenue projections were lowered to $4.23-$4.25 billion from the earlier forecast of $4.29-$4.32 billion.
• The CooperVision segment reported quarterly revenue of $717 million, down from $723.5 million in the previous quarter, primarily due to deliberate inventory drawdowns in the United States.

Cooper Companies (COO) shares tumbled more than 15% during Thursday’s premarket session after the medical device manufacturer announced disappointing quarterly results alongside its unexpected choice to maintain ownership of the CooperSurgical division.

The Cooper Companies, Inc., COO

Investors had anticipated a possible divestiture of CooperSurgical, the firm’s women’s healthcare and fertility division. However, following a strategic assessment concluded on Wednesday evening, Cooper’s board members unanimously determined to keep the business unit.

This reversal proved sufficient to trigger significant selling pressure. COO emerged as the worst performer within the S&P 500 index during Thursday’s premarket hours.

Regarding financial performance, Cooper exceeded adjusted earnings per share projections, reporting $1.15 versus the consensus estimate of $1.12. Revenue, however, disappointed. Third-quarter sales totaled $1.07 billion, undershooting analyst predictions of $1.10 billion.

The revenue gap stemmed primarily from an intentional drawdown of U.S. distribution channel inventory for its CooperVision contact lens division, a strategic action connected to the broader review process.

CooperVision generated third-quarter sales of $717 million during the period concluding July 31, representing a decline from the preceding quarter’s $723.5 million.

Lowered Forecast Compounds Investor Concerns

Cooper additionally revised downward its fiscal year projections. The adjusted earnings per share guidance was reduced to a band of $4.51 to $4.55, down from the earlier range of $4.58 to $4.66. Wall Street consensus stood at $4.63 per share.

Annual revenue guidance also experienced a reduction, now anticipated between $4.23 and $4.25 billion, versus the previous outlook of $4.29 to $4.32 billion. Analysts had been modeling $4.31 billion.

Looking toward the fourth quarter, Cooper projected revenue ranging from $1.06 to $1.08 billion with adjusted earnings per share between $1.05 and $1.09.

Management indicated that the inventory challenges impacting the third quarter would persist through the final quarter.

Analyst Commentary

KeyBanc analyst Brett Fishbin noted that market participants would probably require time to digest the simultaneous impact of reduced guidance and the strategic review’s conclusion without a transaction. He maintains a Sector Weight rating on the shares.

The prospective divestiture of CooperSurgical had been viewed by certain investors as an opportunity to establish a focused contact lens enterprise, potentially making the company more attractive for acquisition. With that possibility eliminated, the investment thesis has shifted.

Cooper did disclose an expansion of its share buyback authorization to $3 billion from the previous $2 billion level.

The company holds the position of second-largest contact lens producer worldwide, trailing Johnson and Johnson’s Acuvue brand.

The domestic contact lens channel inventory reduction continues to represent the primary operational challenge as the company enters the closing quarter of fiscal year 2026.

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