Steris (STE) Q2 2027 Earnings Report

The call was broadly positive: revenue, earnings and Life Sciences performance were strong; Healthcare demand and backlog remained resilient; AST trends improved and destocking was described as ended; and full-year EPS and Life Sciences growth guidance were raised. Offsetting factors included lower underlying Healthcare and AST margins, reduced AST growth guidance, lower year-to-date cash flow, restructuring charges and the lack of expected additional tariff refunds. Overall, the positive operating performance and raised company outlook significantly outweighed the stated challenges.

For fiscal 2027, STERIS maintained total company as-reported revenue growth guidance of 7% to 8% and constant currency organic growth of 6% to 7%, while increasing adjusted earnings per diluted share guidance to $11.35 to $11.55 from $11.10 to $11.30, including approximately $0.18 per share benefit from tariff refunds year-to-date; Healthcare constant currency organic revenue growth is expected at 6% to 7%, AST growth at 6% to 7% compared with 7% to 8% previously, and Life Sciences constant currency organic growth at 9% to 10% compared with 6% to 7% previously. Management said AST should be somewhere in the 6% to 8% growth for that side of the business, expects procedural growth at the lower end of the range, which is somewhere around 3% instead of the high end of that range, which can be 5%, and does not expect any material additional tariff refunds during the remainder of fiscal 2027; all other elements of the most recently provided outlook remained unchanged, the outlook does not include Xodus Medical, and the go-forward model for Xodus reflects maintaining revenue growth in the mid-teens and EBIT margins in the low to mid-50s.