Sales increased by 6 percent at CooperVision (CVI) in terms of dollars as well as local currencies during the third quarter ended July 31, reaching $409.9 million during the period. Both toric contact lenses and single-use spheres grew by 10 percent, representing more than half of the company's total turnover, but multifocal lenses went up by only 4 percent in dollars to $44.3 million.
Sales of silicon hydrogel lenses grew by 16 percent and came to represent 61 percent of CVI's total turnover in the quarter. Sold under the Clariti and MyDay labels, the company's single-use silicon hydrogen lenses continued to grow rapidly, rising by 40 percent. Two-week and monthly silicon hydrogel enjoyed a combined increase of 11 percent, and the management sees strong potential for further growth in this segment, which has come to represent 79 percent of the silicon hydrogel market.
CVI has just obtained approval from regulatory authorities for the launch of a new high-end lens in the two-week space, called Vitality, that will replace a low-margin Avaira contact lens. According to CVI's management, Johnson & Johnson dominates the two-week modality. After making a big statement a year ago in the one-day modality with Oasis, J&J has now made a “more muted” launch in the monthly modality with a new product of its own, called Vita.
In local currencies, CVI's total sales went up by 3 percent in Europe, the Middle East and Africa (EMEA) and by 6 percent in the Americas, with each of the two regions taking up 40 percent of the revenues. Sales in the Asia-Pacific area jumped by 25 percent in dollars and by 16 percent in local currencies, attaining a level of $81.3 million.
CVI claims it is gaining market share in EMEA, coming closer to the local leader, Alcon. CVI says it now has shares of 33 percent in EMEA and 23 percent globally.
Figures released by the Contact Lens Institute for the global soft contact lens market indicate that CVI continued to outperform in all the major markets during the second calendar quarter to June 30, particularly in the single-use segment and in the Asia-Pacific region. According to the institute, the market rose by 5 percent in local currencies during the period, with growth of 10 percent in single-use products and 4 percent in Asia-Pacific.
CVI's gross margin increased to 62 percent in the latest quarter from 58 percent in the same period of 2015, thanks to currency effects and a better product mix. Its operating margin grew to 29.1 percent of revenues against 25.3 percent.
CVI's parent company, Cooper Companies, reported an 11 percent increase in its total revenues to $514.7 million in the May-July period, with growth of 6 percent on a comparable, pro-forma basis. The strong increase was mainly due to a 38 percent jump in Cooper Surgical's revenues to $104.8 million.
The gross margin of the group rose to 62 percent from 59 percent in the year-ago period, in spite of a decline at Cooper Surgical. The operating margin jumped to 20 percent from 11 percent. Net earnings went up to $87.9 million for the quarter, almost double the year-ago level of $44.9 million.
Raising its previous projections for the full financial year, Cooper said that its total sales should range between $1,944 million and $1,957 million, including a turnover of $1,565 million to $1,585 million for CVI. The management sees the operating margin of the group settling at around 24 percent of sales.
The post-Brexit devaluation of the pound sterling will have a positive effect on CVI's production costs, starting in January, as about 40 percent of the products it sells are manufactured in the U.K. It will positively impact 30 percent of the gross margin, but it will have a slightly negative effect on the operating margin and sales.