When: Results expected after market close Wednesday, August 5, 2026; management call the following morning. Prior quarter: FQ4 FY2026 reported May 11-12, 2026 (fiscal year ends March 31).
STE has had a rocky 2026 chart — shares ran from roughly $250 in January to as low as ~$199 in mid-June before staging a sharp recovery, closing around $233 heading into this report (still well below the 52-week high near $268-269). Notably, the stock jumped ~5.5% on July 28 after management announced a dividend increase to $0.69/share (from $0.63), extending its streak of annual dividend hikes, alongside continued momentum from the new buyback authorization.
Wall Street enters the print looking for continued double-digit-ish EPS growth against a backdrop of decelerating AST (Applied Sterilization Technologies) organic growth and lingering tariff/inflation noise. Consensus for FQ1 FY27 sits around $2.49–$2.54 adjusted EPS on revenue of roughly $1.49–$1.51 billion, which would represent about 8% year-over-year revenue growth versus the $2.34 EPS posted in the year-ago quarter. Zacks notes STE has beaten estimates in two of the last four quarters, missed once, and matched once, with a modest average surprise around 0.9%.
FQ4 FY2026 (reported in May) set the tone for this year's guide and is the key comparison point:
"For the fourth quarter, total as reported revenue grew 7%. Constant currency organic revenue grew 5% in the quarter, driven by volume as well as 230 basis points of price." Gross margin was 44%, down 30 basis points year over year, while EBIT margin was 24.2% of revenue, a full-year high, but 60 basis points below the prior year, "mainly driven by inflation and tariffs." Adjusted EPS came in at $2.83, missing consensus slightly. For the full fiscal year, "Full year fiscal 2026 revenue from continuing operations increased 9%; constant currency organic revenue growth was 7%" and "Full year fiscal 2026 as reported diluted EPS from continuing operations increased to $7.93; adjusted EPS per diluted share increased to $10.17."
Segment-wise, Healthcare crossed the $4 billion revenue mark for the first time ("This year, we reached new milestones in Healthcare business, generating $4 billion in revenue and $1 billion in operating income"), AST topped $1 billion in revenue with over $500 million of operating profit, and Life Sciences posted a record year with over $250 million in operating profit.
Management's outlook, issued alongside Q4 results, is the scorecard investors will be checking Q1 progress against:
AST cadence. Management explicitly guided to a soft first half in AST due to tough prior-year comps and med-tech customer destocking, expecting improvement by Q3 and easy comps in Q4: "if you sort of stack all that up, I think one would expect a slower start in the first half and then significantly improving in Q3 and then pretty easy comps in Q4." Watch whether Q1 organic growth in AST tracks toward the low end of the 7-8% full-year range, and whether commentary suggests inventory destocking is stabilizing — CEO Dan Carestio noted "we've seen some inventory reduction across the broader customer segment, right, in terms of med-tech" even as underlying procedure volumes stayed healthy.
Healthcare capital equipment/backlog. Backlog ended FY26 just under $400 million with orders up modestly in Q4; investors will want confirmation that order trends and backlog have held up into Q1 given the lumpy, back-half-loaded shipment pattern management described.
Tariffs, tax rate and inflation. FY26 incremental tariffs were about $46 million, and management is modeling total tariff spend of $60-65 million for FY27, with recent tariff changes actually described as a net positive: "the recent changes are favorable to us and serve to offset the volume increase for next year. So in an odd twist, tariffs are an okay thing for us looking at '27." Freight/energy costs tied to oil prices are the bigger swing factor to monitor. Separately, the adjusted effective tax rate is guided to ~25% (up from 24.4% in FY26) due to withholding taxes tied to increased capital returns — any deviation here could move EPS optics.
Capital allocation execution. The board approved a new $1 billion buyback authorization (roughly double the prior program), with management targeting $200-300 million per year in repurchases going forward, a more consistent commitment than in past years. The July 27 dividend increase to $0.69 (a ~9.5% hike, extending the 20+ year growth streak referenced on the call) should also be confirmed as it flows into this quarter's declared dividend.
M&A contribution. Two Healthcare tuck-ins — a vertical integration of the MEDglas wall supplier and a GI products acquisition — are expected to add about $45 million of inorganic revenue in FY27, roughly 100 basis points of Healthcare segment growth; watch for confirmation these are tracking to plan.
This is a "prove it" quarter for STERIS following a Q4 that saw margin pressure from tariffs/inflation and a full-year EPS guide that, while showing 9-11% growth, is set against a stock that has been under real pressure for much of 2026. The setup is fairly binary on AST: any signs that med-tech inventory destocking is deepening rather than stabilizing would raise doubts about the back-half acceleration management has promised, while confirmation of steady Healthcare/Life Sciences organic growth (6-7% guided) and progress on the 50-bps margin expansion target would support the bull case that FY27 delivers double-digit bottom-line growth as management reiterated it expects "to continue to grow the business mid- to high single digits organically over time and leverage that to deliver double-digit bottom line growth." With consensus modeling ~8% revenue growth and EPS in the low-$2.50s for the quarter, the bar is roughly in line with full-year guidance — a clean beat-and-reaffirm, especially with reassuring AST commentary, would likely be well received given how much of the stock's earlier-year decline already reflects tariff/margin and AST destocking concerns.