STE · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

STERIS plc · 2026-08-07 · Importance 49 · Surprise 32 · No source text

Gross profit increased 8.9% to $684.2 million for the three months ended June 30, 2026, from $628.0 million. Total gross margin expanded to 45.8% from 45.1%, while product gross margin increased to 50.0% from 47.9% and service gross margin declined to 41.7% from 42.4%. Pricing contributed 100 basis points, productivity 40 basis points, mix 40 basis points, and lower net tariffs 20 basis points to the margin improvement. Inflation reduced gross margin by 60 basis points, adjustments and other charges by 50 basis points, acquisitions by 10 basis points, and materials costs by 10 basis points.

Key facts

• Gross profit — Product for the three months ended June 30, 2026: $368.8 million, compared to $330.8 million for the three months ended June 30, 2025 (11.5% increase); Product gross profit percentage 50.0% vs 47.9%. source
• Total gross profit for the three months ended June 30, 2026: $684.2 million, compared to $628.0 million for the three months ended June 30, 2025 (8.9% increase); total gross profit percentage 45.8% vs 45.1%. source
• Gross profit increased by $56.2 million to $684.2 million for the three months ended June 30, 2026 compared to prior year (8.9% increase). source
• Gross profit — Service for the three months ended June 30, 2026: $315.3 million, compared to $297.2 million for the three months ended June 30, 2025 (6.1% increase); Service gross profit percentage 41.7% vs 42.4%. source
• Gross profit percentage drivers for the three months ended June 30, 2026: pricing +100 basis points, productivity +40 basis points, mix +40 basis points, lower net tariffs +20 basis points; offset by inflation -60 basis points, adjustments and other charges -50 basis points, acquisitions -10 basis points, materials cost -10 basis points. source

Impact estimates