Stryker cuts 2026 forecast amid joint procedure slowdown

Stryker has lowered its sales guidance for 2026 after reporting a slowdown in joint replacement procedures. The company now expects sales growth of 6.5% to 7.0%, down from its previous forecast of 8.3% to 9.3%.

CEO Kevin Lobo attributed the decline to a broader market deceleration, with fewer hip and knee procedures performed in the third quarter than anticipated. Knee sales grew just 1.1% compared to the previous year, while hip sales decreased by 1%.

Economic Challenges Impact Patient Decisions

Lobo cited affordability concerns as a key factor, with patients delaying procedures due to higher insurance premiums and deductibles. He noted that the market for joint replacements has historically been tied to economic cycles.

“There are patients that today are having trouble being able to make their deductible because their deductibles are higher,” Lobo said. “They’re actually living with pain a little bit longer than they would like to.”

Investment in Soft Tissue Robotics

Despite the slowdown, Stryker recently announced a $400 million investment in CMR Surgical, a soft tissue robotics firm. As part of the deal, Stryker will become the exclusive U.S. distributor of CMR’s Versius Plus robot.

Lobo expressed excitement about the partnership, stating that “we feel it is the best robot on the market to be able to succeed in multiple sites of care; the modular nature makes it great for the ambulatory surgery center as well as working well in hospitals.”

The decision to partner with CMR rather than acquire the company outright was driven by the desire to mitigate risk and development costs. Stryker also wanted to ensure the robot’s commercial success in the U.S. market before committing to a full acquisition.

CFO’s Early Warning and Market Challenges

CFO Preston Wells initially highlighted the sales slowdown last month. The company faced additional challenges this year, including a cyberattack and new software implementation in its orthopedics division.

CEO Lobo attributed the sales decline to a slow market and economic difficulties, rather than these internal issues.

Leadership Transition and Future Prospects

As Lobo prepares to step down as CEO at the end of the year, he acknowledged that he would have preferred to deliver better news in his final earnings call. Chief Operating Officer Spencer Stiles will take over as CEO in January.