The Cochlear Ltd (ASX: COH) share price is down close to 40% after giving a painful FY26 update.
Cochlear is a global leader at providing devices to help people hear.
Weak FY26 update
The company said that since January, trading conditions for cochlear implants in developed markets have been softer than expected.
On top of that, there’s heightened uncertainty in fourth-quarter sales from the Middle East due to the conflict. FY26 second-half sales growth is expected to be between 2% to 6% in constant currency terms.
Cochlear said that consumer sentiment has reached a historic low in the US, while Western Europe surgical volumes have been constrained, resulting in growing waiting lists for surgery in markets such as the UK and Germany, while industrial action in Italy and Spain has restricted ‘surgical throughput’.
In emerging markets, growth has been solid, but it’s expecting order cancellations and a heightened risk of delivery delays to some countries.
The business said that it remains confident in its growth strategy and will strengthen its investment to support growth of the adult and seniors segment, to help more people to hear.
Cochlear said it’s accelerating plans to “reshape the cost base to provide increased capacity to invest in growth”.
Cochlear said that taking into account the lower-than-expected sales, the potential for provisions for receivables required due to the Middle East conflict, a lower gross profit margin, expenses from reshaping the cost base, and the impact of the stronger Australian dollar on earnings, it decided to reduce its earnings guidance.
The ASX share said underlying net profit is now expected to be between $290 million to $330 million for the 2026 financial year.
Final thoughts on the Cochlear share price
The company said that the clinical need to cochlear implants continues to grow, particularly for the adult and seniors segment.
Cochlear also said that customer feedback indicates increasing awareness of the links between hearing loss and cognitive decline.
The business has been smashed, perhaps overly so on a longer-term view. I think the current effects on the global economy will be resolved and normalise, even if that takes longer than expected – as we saw a few years ago.
There are other ASX growth shares I’d rather invest in where the growth outlook is clearer.
