LeMaitre (LMAT) Q3 2026 earnings review
LeMaitre sales rise 11%, but higher costs force outlook cut
LeMaitre, a maker of implants and tools for blood-vessel surgery, grew sales faster this quarter while its profit missed its own target. Sales from businesses owned a year ago rose 12%, but operating costs climbed 18% excluding a year-ago tax credit and held profit per share to $0.65. Chief executive George LeMaitre cut the fourth-quarter sales and profit outlook for a second straight quarter.
| Sales from businesses owned a year ago | +12% +10% last quarter |
|---|---|
| Profit per share, excluding one-offs | $0.65 missed $0.66–0.71 plan; +5% from a year ago |
| Artegraft sales growth | +18% +34% last quarter |
| Full-year profit per share outlook | Cut $0.09 middle of the range: $2.80 (+18% excluding one-offs) |
⚖️ Verdict: 🔴 Bearish
The story got worse because rising costs and a lower fourth-quarter plan outweighed a recovery in surgical unit volume. Growth in the flagship Artegraft implant also slowed to 18% from 34% last quarter, and gross margin missed the company's target. On the positive side, the business ended a six-year deal drought by spending $19 million on B. Braun blood-vessel products.
The question now is whether international Artegraft growth is cooling off or whether the new 171-person sales team can lift volume enough to cover its higher costs. One view is that European hospital adoption still has room to run; the other is that the cow-artery implant is merely replacing the company's older grafts while expenses stay high. Fourth-quarter operating margin and international Artegraft sales will tell.
🐂 Bull Case
Sales Rep Hiring Lifted Unit Volume
LeMaitre makes implants and tools for blood-vessel surgery, and its sales from businesses owned a year ago grew 12% in the third quarter. Price increases contributed 7% of that growth, matching the second quarter after three quarters of slowing price gains. Surgical unit volume supplied the other 5%, stepping up from 3% last quarter as hospital ordering recovered from a catheter recall.
- Sales in Europe, the Middle East and Africa: up 18% from a year ago to $20.8 million
- Grafts (replacement blood vessels): up 20% from a year ago
- Shunts (tubes that redirect blood during surgery): up 14% from a year ago
- Sales representatives: up 13% from a year ago to 171, reaching the full-year target of 170 to 180 a quarter early
The volume recovery matters because price increases have done most of the work since 2022, and those price gains are no longer accelerating. Having 171 reps in the field and new European warehouses gives the company more capacity to sell units, while "higher ASPs and operational efficiencies" lifted gross margin by 0.9 percentage points excluding last year's tax credit.
What to watch: the split between price and unit growth in the fourth quarter. Holding unit growth near 5% would show the larger sales team is winning hospital volume on its own rather than just bouncing back from an easy comparison.
B. Braun Deal Deploys Cash After Six Years
Critics have questioned LeMaitre's growing cash pile and its unused $100 million share buyback plan because the company had not bought a business since June 2020. In October, the medical device maker spent $19.2 million to buy "polyester and silver-coated grafts, valve cutters and vein strippers" from B. Braun. Chief executive George LeMaitre said "The acquired B. Braun products will strengthen our core vascular portfolio while leveraging our expanding 31-country sales force."
The acquired products brought in $9.4 million of sales in 2025, all outside North America, so LeMaitre paid about two times annual sales. B. Braun will keep selling the devices for 18 to 24 months and share the profits until customer contracts transfer over. For the fourth quarter, the buyer expects only $150,000 of sales and no operating profit from the deal.
What to watch: the 2027 sales contribution from the B. Braun lines when the company gives its full-year outlook in February. A fast transfer of hospital contracts into LeMaitre's direct European sales force would show the deal can lift profit next year.
🐻 Bear Case
Higher Costs Cut Into Profit Growth
"We expect 2026 to be another year of healthy sales (+11%) and EPS growth (+18%)," chief executive George LeMaitre said. That full-year figure rests on the first half of the year, because profit growth in the second half has slowed to a crawl and missed the company's own targets.
Third-quarter profit per share was $0.65, missing the $0.66 to $0.71 outlook range even though revenue finished $0.7 million above the middle of its range. Excluding a one-time tax credit in the third quarter of 2025, operating expenses rose 18% to $31.0 million after what the company called "Q3 2025 belt-tightening". Sales and marketing rose 1.8 percentage points of revenue to 21.3%, and research and development rose 1.6 percentage points to 6.5%.
Gross margin also fell 0.5 percentage points short of the company's 72.2% target, landing at 71.7%. Because of the higher spending and lower gross margin, LeMaitre cut its fourth-quarter operating profit outlook by $1.0 million at the middle of the range, to 4% growth.
What to watch: operating expenses as a share of revenue in the fourth quarter. Another quarter near 45% of revenue would mean the expanded sales team and new warehouses are raising the permanent cost base faster than sales.
Artegraft Growth Slowed and Asia Cooled
Artegraft, a cow-artery implant used for dialysis access and leg bypass that makes up about a fifth of company sales, is LeMaitre's main growth product. LeMaitre said "Biologics continue to drive sales due to Artegraft’s international launch and the continued growth of RestoreFlow Allografts", which are preserved human-tissue implants.
Despite that praise, total Artegraft sales growth slowed to 18% from a year ago, down from 34% in the second quarter and 36% in the first. At the same time, sales growth in Asia Pacific dropped to 5% after running at 18% in both the first and second quarters. The earnings release did not give the dollar figure for international Artegraft sales, which usually appears on the conference call.
What to watch: international Artegraft dollar sales on the conference call, set against the $2.8 million recorded in the second quarter. A decline from that level would show the European launch is losing steam just as US growth cools.
Risks this quarter didn't answer
Four standing operational and regulatory concerns received no new numbers or updates in the third-quarter earnings release.
- FDA inspection of the New Jersey Artegraft factory: no update in the release on the June 2026 inspection findings; the quarterly filing will show if regulators took further action.
- RestoreFlow tissue processing move to Burlington: no update on whether the transfer from Illinois will finish by year-end or when tissue supply will stop limiting sales.
- Irish approval for RestoreFlow: delayed three times previously to the first half of 2027, with no timeline update in the release.
- Carotid shunt competition from stenting: shunt sales grew 14% vs 18% in the second quarter, with no commentary on whether clinical data favouring stents is hurting US surgery volume.
👓 Other Themes
Currency Swings Reduced Third-Quarter Sales
LeMaitre generates nearly two-fifths of its sales outside the Americas, leaving it exposed to foreign exchange rates and export disruptions in the Middle East. Currency moves reduced third-quarter reported sales by $0.44 million and will trim fourth-quarter sales by $0.51 million according to the outlook tables, while the release gave no update on $0.4 million of Middle East orders that were stranded last quarter.
💲 Other KPIs
Cash and short-term investments rose by $13.5 million from last quarter, faster than the $9.0 million added in the second quarter. The September 30 balance does not yet reflect the $19.2 million spent in October to buy vascular products from B. Braun or the $0.25 per share quarterly dividend.
The diluted share count fell 5.4% from a year ago and dropped from 24.53 million in the second quarter. The decrease came from accounting rules for the company's convertible debt rather than share buybacks, as the $100 million repurchase plan remained untouched.
Money owed by hospital customers rose 10.7% from a year ago, moving in line with the 11.3% rise in reported revenue. Since the end of 2025, receivables have grown by $2.3 million, pulling $3.3 million of cash out of operating cash flow over the first nine months.
🔮 Guidance
Cut. The middle of the range came down by $1.2 million to $70.9 million, which calls for 10% reported growth and 11% growth from businesses owned a year ago. The lower plan comes even though the fourth quarter includes about $150,000 of sales from the newly acquired B. Braun products.
Cut. The target dropped by 0.5 percentage points after third-quarter gross margin missed its own target by the same amount. At 72.1%, the fourth-quarter plan still calls for a 0.4 percentage point improvement from the third quarter.
Cut. Management lowered the middle of the range by $1.0 million to $19.5 million, or 4% growth from a year ago, down from the 9% growth planned three months ago. The newly acquired B. Braun products will break even on operating profit in the quarter.
Cut. The middle of the range fell by $0.055 to $0.725 (printed as $0.73, or 7% growth from a year ago), down from the 15% growth planned in the second quarter. Lower planned revenue and gross margin drove the reduction.
Cut. The middle of the full-year range slipped by $0.5 million to $275.8 million, even after beating the third-quarter midpoint by $0.7 million and adding $0.15 million from B. Braun. It is the second consecutive cut to the full-year midpoint: $0.0M in Q1, -$3.7M in Q2, and -$0.5M in Q3.
Cut. The full-year target came down by 0.3 percentage points, erasing the raises from earlier in the year and returning to the 72.1% level first set in February.
Cut. The middle of the range fell by $1.4 million to $75.4 million, which is 17% growth excluding last year's tax credit vs 19% planned last quarter. Across the year, the midpoint moves have run +$1.95M, -$3.05M, and -$1.40M.
Cut. Management reduced the middle of the range by $0.095 to $2.80, taking full-year profit per share growth excluding last year's tax credit down from 21% to 18%. Across the last three quarters, the midpoint changes have run +$0.095, -$0.115, and -$0.095.
❓ Key Questions
Why did Artegraft growth slow by half in Q3?
Artegraft sales grew 18% from a year ago after growing 34% in the second quarter and 36% in the first. How much of the slowdown came from the US versus Europe, and what were international Artegraft dollar sales?
Why did fourth-quarter sales targets fall despite a Q3 beat?
Third-quarter sales beat the middle of the plan by $0.7 million and B. Braun adds $0.15 million in Q4, yet the fourth-quarter sales midpoint dropped by $1.2 million. Which product line or region weakened?
What slowed Asia Pacific growth from 18% to 5%?
Asia Pacific sales grew 18% in both the first and second quarters before dropping to 5% in the third quarter. Was the slowdown caused by order timing, currency, or weaker hospital demand?
What is the status of the New Jersey FDA inspection?
Following the June 2026 FDA inspection observations at the North Brunswick plant that makes Artegraft, has the agency accepted the company's July response or requested more changes?