The Cooper Companies (COO) Faces Near-Term Pressure from Slowing Contact Lens Demand

The Cooper Companies (COO) has reduced its fiscal 2026 profit and revenue forecasts due to weaker-than-expected demand for contact lenses affecting its CooperVision business. The company now anticipates adjusted earnings of $4.51–$4.55 per share, down from $4.58–$4.66, and revenue guidance decreased to $4.23–$4.25 billion from $4.29–$4.32 billion.

Third-quarter revenue was reported at $1.07 billion, falling short of Wall Street's estimate of $1.10 billion, while adjusted EPS of $1.15 exceeded expectations. The decline was primarily in CooperVision, with revenue dropping to $717 million. The company attributes the issue to a reduction in U.S. channel inventory, which is expected to impact the fourth quarter as well.

CooperVision management decided to retain CooperSurgical rather than sell, as the latter was not seen as a way to simplify the company or unlock value. While some of the current weakness may be temporary, the broader slowdown remains a concern. If inventories normalize, CooperVision could experience a recovery in sales growth. The company has strengthened its position in the global contact lens market through investments in new products, expanding sales and marketing, and improving inventory and logistics operations.

It also increased its share repurchase authorization from $2 billion to $3 billion. Despite the near-term challenges, the company maintains a long-term free cash flow objective of over $2.2 billion from fiscal 2026 through 2028.