SYK · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

STRYKER CORP · 2026-07-31 · Importance 62 · Surprise 58

Second-quarter gross profit increased to $4,498 million from $3,841 million, and gross margin expanded to 68.3% from 63.8%. The 450-basis-point quarterly improvement included a 260-basis-point benefit from reversal of 2025 tariffs, a 110-basis-point benefit from lower amortization of inventory stepped up to fair value, and a 70-basis-point benefit from volume and mix, partly offset by 30 basis points of higher manufacturing and supply-chain costs. Six-month gross margin increased 210 basis points to 65.9%, despite a 100-basis-point manufacturing and supply-chain cost headwind associated primarily with idle production time from the first-quarter 2026 cybersecurity incident. Management expects faster growth in the lower-margin MedSurg and Neurotechnology segment to create an unfavorable mix effect going forward.

Key facts

• Three months 2026 gross profit: $4,498 million and gross margin 68.3% of net sales. source
• Six months 2026 gross profit: $8,308 million and gross margin 65.9% of net sales. source
• Gross profit percent drivers three months: volume and mix +70 bps, manufacturing and supply chain costs -30 bps, structural optimization and other special charges +40 bps, inventory stepped up to fair value +110 bps, reversal of 2025 tariffs +260 bps. source
• Gross profit percent drivers six months: sales pricing +10 bps, volume and mix +40 bps, manufacturing and supply chain costs -100 bps, structural optimization and other special charges +50 bps, inventory stepped up to fair value +80 bps, reversal of 2025 tariffs +130 bps. source