ConMed Cuts Top Of Growth Outlook To 5.5%, Says Distributor Order Timing Flattered Third Quarter
The CFO says it beat the low end of its third-quarter revenue guidance by $1.5 million and did not carry that into the fourth quarter.
ConMed, the surgical device maker, lowered the high end of its 2026 organic constant currency sales growth range to 5.5% from 6%, because distributor order timing helped the third quarter, CFO John Gallagher told analysts on the company's earnings call on Wednesday. The low end of the range stays at 5%.
Order timing behind the trim
Gallagher said international is largely a distributor business, and the timing of those orders aided the third quarter. The company remains on track for international performance in the second half, he said, but is "not underwriting that to repeat again in Q4."
Pressed by a Bank of America analyst to quantify the benefit, Gallagher said ConMed beat the low end of its third-quarter organic constant currency revenue guidance by $1.5 million and did not roll that into the fourth-quarter guide. He said the company has "very high confidence" in at least 5% growth for the year.
Third-quarter net revenue was $335.6 million, and organic constant currency sales rose 6.7%. Fourth-quarter guidance implies organic constant currency growth of 5.1% to 6.8%, Gallagher said.
Margin slips, EPS range rises
Full-year adjusted gross margin guidance is now about 57.5%, which Gallagher tied to international mix, since distributor sales carry slightly lower margins, plus discrete operations and inventory items. He said the year should still deliver 50 to 100 basis points of margin expansion. Adjusted EPS guidance moved to $4.54 to $4.61 from $4.48 to $4.60, after third-quarter adjusted EPS of $1.04.
Gallagher also said full-year EPS is flat in 2026 even as the company jumps over a 45-cent headwind from its exited GI business, which he does not expect to repeat on a full-year basis.
U.S. orthopedics and the strategy question
ConMed makes devices for orthopedic and general surgery, including the AirSeal insufflation system, Buffalo Filter smoke evacuation and the BioBrace implant. A Piper Sandler analyst wondered whether competitive challenges were part of the modest guide-down. CEO Pat Beyer said U.S. orthopedic trends are improving over two- and three-year comparisons, and he expects U.S. growth to return in the first half of next year as distributors are onboarded. U.S. orthopedic sales fell 1.7% in the third quarter.
Asked about strategic action, Beyer said the company does not comment on rumors, but "I can see why somebody would be attracted to ConMed."
Gallagher said ConMed will lay out 2027 capital allocation specifics on its fourth-quarter call.
Sources
- CONMED Corporation to Report Third Quarter 2026 Financial Results on October 28, 2026 – Company Announcement - FT.com — Financial Times
- Conmed: Q3 Earnings Snapshot — Associated Press
- CONMED Non-GAAP EPS of $1.04 beats by $0.04, revenue of $335.6M misses by $0.65M (CNMD:NYSE) | Seeking Alpha — seekingalpha.com
- Conmed: Q3 Earnings Snapshot | 9news.com — Associated Press
