Stryker Drops as Disruptions and Hip Sales Weigh

Stryker shares fell 9.7% between Tuesday and Wednesday's open after CFO Preston Wells shared operational updates at the Wells Fargo Healthcare Conference. The company is managing supply delays in its peripheral vascular unit alongside slower demand for hip implants.

The supply disruptions follow a March cyberattack that affected manufacturing and shipping operations. Stryker previously expected these issues to clear by the third quarter, but Wells stated they could extend into the fourth quarter. The company acquired Inari Medical last year for around $4.9 billion, and integrating its mechanical thrombectomy plant into Stryker's operations faced ripple effects from the cyber incident, according to William Blair analyst Steven Lichtman.

Wells explained that the manufacturing bottleneck prevents Stryker from completely fulfilling orders for existing peripheral vascular clients and reaching new accounts. The business is prioritizing key customers to maintain procedural inventory, though overall stock remains below desired targets.

Summer hip implant sales also came in below expectations. Stryker reported general softness across European joint replacements, while U.S. volume slowed due to summer seasonality and patient financial constraints like inflation and rising insurance deductibles. In addition, management cited competitive pressure from lacking a hip impactor product.

Stryker maintained its financial guidance despite these head winds. Wells noted that demand for capital equipment remains resilient following the cyberattack, supported by a healthy volume of backorders.