PFE · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

PFIZER INC · 2026-08-04 · Importance 24 · Surprise 14 · No source text

Second-quarter cost of sales increased $314 million to $4.1 billion, raising cost of sales to 27.2% of revenue from 25.8%. The increase reflected a $130 million unfavorable sales-mix effect, $90 million of higher amortization of acquired-inventory fair-value step-ups primarily related to the Oxbryta impairment, and $60 million of unfavorable foreign exchange. Six-month cost of sales increased approximately $1.0 billion to $7.6 billion, with the year-to-date ratio rising to 25.9% from 23.4% because of the non-recurrence of a favorable 2025 royalty-accrual revision, $350 million of foreign-exchange pressure and a $100 million unfavorable mix effect.

Key facts

• Product revenue deductions total for three months ended June 28, 2026: $9,022 million; for three months ended June 29, 2025: $8,436 million; six months ended June 28, 2026: $17,280 million; six months ended June 29, 2025: $16,569 million. source
• Cost of sales for three months ended June 28, 2026: $4,092 million (27.2% of total revenues); for three months ended June 29, 2025: $3,778 million (25.8% of total revenues). source
• Non-GAAP Adjusted cost of sales for the three months ended June 28, 2026: $3,656 million. source
• GAAP Reported cost of sales for the three months ended June 28, 2026: $4,092 million. source
• Cost of sales increased $314 million in the second quarter of 2026, primarily due to a $130 million unfavorable change in sales mix, $90 million increase due to higher amortization of the fair value step-up of acquired inventory (driven primarily by the Oxbryta impairment), and a $60 million unfavorable impact of foreign exchange. source

Impact estimates