Cencora Raises 2026 Sales Guidance to $343.8B–$350.2B Despite Revenue Miss
Cencora reported Q1 revenue of $85.93B, 5.5% year-over-year growth but slightly below the $86.03B Wall Street estimate, and delivered adjusted EPS of $4.08 versus $4.03 expected. The company raised fiscal 2026 sales growth guidance to 7%-9% and boosted full-year sales forecast to $343.79B-$350.22B.
1. Q1 Earnings and Revenue Performance
Cencora reported adjusted earnings per share of $4.08 for the first quarter of fiscal 2026, outperforming the consensus estimate of $4.03. On a GAAP basis, diluted EPS rose 14.8% year-over-year to $2.87 from $2.50. Total revenue for the quarter reached $85.93 billion, up 5.5% from the prior year, effectively matching Wall Street’s forecast of $86.03 billion. U.S. Healthcare Solutions revenue increased by 5.0%, driven by strong specialty and GLP-1 product volumes, while International Healthcare Solutions grew 9.6%, led by European distribution gains.
2. Margin Expansion and Profitability Drivers
Gross profit expanded by 20.1% to $3.1 billion, lifting the gross margin by 44 basis points to 3.58%. The improvement reflects higher gross profit in both reportable segments and a favorable LIFO credit compared with the prior year. Operating income rose 7.7% to $760.4 million, with operating margin edging up to 0.88%. Adjusted operating income increased 11.9% to $1.10 billion, representing a 1.24% margin, supported by cost synergies from the January 2025 acquisition of Retina Consultants of America and disciplined expense management.
3. Updated Fiscal 2026 Guidance
Following the quarter’s results, Cencora raised its full-year sales growth outlook from a 5–7% range to 7–9%, translating to revenue guidance of $343.79 billion to $350.22 billion. Adjusted EPS guidance remains at $17.45–$17.60, narrowly below the consensus of $17.61. The company also lifted adjusted operating income growth projections to 11.5–13.5%, reflecting the strategic integration of OneOncology and continued momentum in specialty services.
4. Investor Reaction and Key Risks
Despite the beat on earnings and stronger margin profile, Cencora’s shares declined by 6.7% following the announcement, as revenue narrowly missed the top-line estimate. Investors are monitoring potential headwinds from customer contract losses—most notably in the oncology wholesale channel—and the impact of higher interest expense, which rose by $44.5 million year-over-year to $72.4 million due to new debt financing for acquisitions. The effective tax rate of 20.1% also warrants attention against previous guidance.