VLTO · 10-Q · 2026Q2 · Full report
Gross Margin Drivers
Veralto Corp · 2026-04-29 · Importance 44 · Surprise 32
Cost of sales increased $41 million (7.8%) year-over-year in the quarter ended April 3, 2026, driven primarily by higher labor costs. Gross profit margin decreased by 30 basis points to 60.1% versus 60.4% in the prior-year quarter, with the margin decline primarily attributed to incremental labor costs. The margin decrease was partially offset by positive pricing actions, favorable product mix and a net positive gross margin contribution from recent acquisitions. Recent acquisitions also had acquisition-related fair value inventory adjustments which modestly affected margin comparisons.
Key facts
- Cost of sales was $568 million for the three-month period ended April 3, 2026 and $527 million for the three-month period ended April 4, 2025.
- Gross profit margin was 60.1% for the three-month period ended April 3, 2026 and 60.4% for the three-month period ended April 4, 2025.
- The gross profit margin decrease of 30 basis points year-over-year for the three-month period ended April 3, 2026 was driven by incremental year-over-year labor costs.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -2.9% | Cost of sales was $568 million for the three-month period ended April 3, 2026 and $527 million for the three-month period ended April 4,… |
| margin | negative | realized | -0.3% | Gross profit margin was 60.1% for the three-month period ended April 3, 2026 and 60.4% for the three-month period ended April 4, 2025. |