SYK · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

STRYKER CORP · 2026-10-30 · Importance 54 · Surprise 40

Third-quarter gross profit rose to $4,248 million from $3,852 million, and gross margin increased to 65.2% from 63.6%.,Quarterly margin improvement reflected 60 basis points from volume and mix and 100 basis points from lower amortization of inventory stepped up to fair value; manufacturing and supply-chain costs reduced margin by 20 basis points.,Nine-month gross profit was $12,556 million versus $11,437 million, and gross margin increased to 65.6% from 63.7%.,Nine-month margin benefited from a 90-basis-point reversal of 2025 tariffs and 90 basis points from lower inventory step-up amortization, partly offset by an 80-basis-point increase in manufacturing and supply-chain costs, primarily tied to idle production time from the first-quarter 2026 cybersecurity incident.

Key facts

• In the nine months, gross margin increased to 65.6% from 63.7%, driven by reduced import tariffs and lower amortization of stepped-up inventory, partially offset by higher manufacturing and supply chain costs, primarily due to idle production time related to the first-quarter 2026 cybersecurity incident. source
• Gross profit in the three months was $4,248 million, compared with $3,852 million in the prior-year period. source
• In the three months, gross margin increased to 65.2% from 63.6%, primarily driven by lower amortization of inventory stepped up to fair value. source
• Three-month gross-margin bridge components included volume and mix of +60 basis points, manufacturing and supply chain costs of (20) basis points, structural optimization and other special charges of +20 basis points, and inventory stepped up to fair value of +100 basis points. source
• Gross profit in the nine months was $12,556 million, compared with $11,437 million in the prior-year period. source
• Nine-month gross-margin bridge components included sales pricing of +10 basis points, volume and mix of +50 basis points, manufacturing and supply chain costs of (80) basis points, structural optimization and other special charges of +30 basis points, inventory stepped up to fair value of +90 basis points, and reversal of 2025 tariffs of +90 basis points. source