COO Q3 2025 Analysis: CooperVision Shines as CooperSurgical Stumbles

Cooper Companies, Inc. (COO), a major player in the medical device world, recently filed its financial results for the third quarter of fiscal year 2025. For anyone following the company, the report offers a fascinating look into the performance of its two distinct business arms: CooperVision, which makes contact lenses, and CooperSurgical, focused on women's health and fertility products.

Let's dive into the numbers from their latest 10-Q filing to see how the company is navigating the current market.

For the three months ended July 31, 2025, Cooper Companies reported total net sales of $1.06 billion, a solid 6% increase from the $1.0 billion in the same period last year. However, despite higher sales, net income slightly decreased to $98.3 million from $104.7 million year-over-year.

To better understand how revenue is transformed into profit, the following flow diagram visualizes the company's income statement for the quarter.

A Tale of Two Segments

The overall numbers mask a significant divergence in performance between Cooper's two main divisions.

CooperVision Shines

The company's larger segment, CooperVision, was the clear star of the quarter. It posted net sales of $718.4 million, up 6% from the prior year. This growth was particularly strong in its specialty lens categories:

• Toric and multifocal lenses: Sales grew by an impressive 10%.
• Sphere and other lenses: Sales saw a more modest 3% increase.

More importantly, CooperVision's profitability soared. Its operating income—the profit from core business operations—jumped 17% to $202.6 million. This indicates strong demand and effective cost management within the contact lens business.

CooperSurgical Faces Headwinds

The story at CooperSurgical is quite different. While its sales grew 4% to $341.9 million, its profitability took a sharp downturn. The segment reported an operating loss of $4.2 million, a stark reversal from the $41.3 million in operating income it generated in the same quarter last year.

What caused this dramatic swing? The main culprit appears to be a significant rise in operating costs. Selling, General, and Administrative (SGA) expenses for CooperSurgical—which cover costs like sales, marketing, and administrative salaries—ballooned by 19% to $150.9 million. This surge in spending completely erased the segment's gross profit, pushing it into the red.

Key Financial Takeaways

• Rising Operating Costs: Overall SGA expenses for the company grew 11%, outpacing the 6% revenue growth. This trend, driven primarily by the CooperSurgical segment, is a key area to watch.
• Shareholder Returns: The company is actively returning capital to shareholders through stock buybacks. It repurchased over 724,000 shares for approximately $52.6 million during the quarter. This comes after a decision in late 2023 to discontinue its semiannual dividend, signaling a strategic shift toward repurchases and reinvestment.
• Reduced Interest Payments: On a positive note, interest expense fell 11% to $25.4 million, suggesting effective management of the company's debt.

Looking Ahead

Cooper Companies presents a mixed but compelling picture. The CooperVision segment is a powerful engine of growth and profitability, demonstrating its strength in the global contact lens market. However, the significant operating loss at CooperSurgical raises questions about its cost structure and near-term profitability.

Investors will be keenly watching to see if management can rein in expenses at CooperSurgical and restore its profitability, all while sustaining the impressive momentum at CooperVision. The company's ability to balance these two dynamics will be crucial for its overall success.