SYK · Earnings call · 2026Q3T · Full report

Gross Margin Drivers

STRYKER CORP · 2026-10-29 · Importance 24 · Surprise 14

Adjusted gross margin was 65.4% in Q3 2026, up 40 basis points from Q3 2025. Management attributed the improvement to a net tariff benefit and operational efficiencies. Adjusted operating margin reached 26.2% of sales, a 60-basis-point year-over-year increase, reflecting gross-margin improvement and continued expense discipline.

Key facts

• Stryker said it intended to continue pursuing year-over-year margin improvement, including through manufacturing and other operational efficiencies.
• Stryker said margin expansion was limiting the effect of its sales shortfall on adjusted EPS and that it continued to generate strong cash flows.
• Stryker's Q3 2026 adjusted EPS growth was driven by gross-margin expansion supported by operational efficiencies and disciplined expense management.
• Stryker's adjusted gross margin was 65.4% in Q3 2026, up 40 basis points year over year, reflecting a net tariff benefit and operational efficiencies.
• Stryker's adjusted operating margin was 26.2% in Q3 2026, up 60 basis points year over year, reflecting gross-margin improvement and expense discipline.