Cochlear (ASX:COH) has issued a trading update, revising its FY26 underlying net profit guidance downwards to $290–$330 million.
The medical device giant cited a "softer than expected" performance in developed markets and mounting geopolitical instability as primary drivers for the reduction.
While the company maintains long-term confidence in its growth strategy, it now expects second-half sales growth to moderate to between 2% and 6% in constant currency.
The downturn is largely attributed to stalling surgical volumes across the US and Europe.
In the United States, consumer sentiment has plummeted to historic lows, leading many adults and seniors to defer cochlear implants as "discretionary" healthcare decisions.
Meanwhile, Western Europe is grappling with hospital capacity constraints and industrial action in Italy and Spain, which have lengthened surgical waiting lists.
Additionally, the Middle East conflict has introduced heightened uncertainty, necessitating potential provisions for receivables and impacting regional sales projections.
CEO and President Dig Howitt emphasised that the company is taking proactive steps to "reshape the cost base" to support future investment.
Despite the immediate financial headwinds and the negative impact of a stronger Australian dollar, Cochlear reported improving market share following the successful rollout of the Nucleus Nexa System.
The company remains focused on its R&D pipeline, including clinical trials for a drug-eluting electrode and a totally implantable cochlear implant.