Smith & Nephew PLC (LSE:SN.) reported first-quarter revenue broadly in line with analyst expectations on Wednesday, although a steep decline in its US knee implant segment weighed on investor sentiment and pushed the shares 1.9% lower following the update.
The medical technology group generated revenue of $1.50 billion for the quarter ended 28 March, delivering underlying growth of 3.1%, compared with analyst forecasts of 3.2%. The result marked a slowdown from the 6.2% growth achieved during the fourth quarter of 2025.
Reported revenue increased 6.6%, supported by a 350 basis point benefit from foreign exchange movements. The quarter also contained one fewer trading day than the comparable period last year, with adjusted daily sales growth reaching 4.7%. Revenue rose from $1.41 billion in the same quarter a year earlier.
Orthopaedics division misses expectations on US knee slowdown
The company’s Orthopaedics division underperformed market forecasts, posting underlying growth of 0.8% against analyst expectations of 2.5%. The weaker showing was driven primarily by a 10.3% fall in US Knee Implant sales.
Management said the decline reflected “continuing and deliberate trade-offs to balance growth, profit and asset efficiency” ahead of the planned third-quarter launch of the LANDMARK Knee System.
Sports Medicine delivers stronger growth
Sports Medicine & ENT produced one of the strongest performances within the group, recording underlying growth of 6.7%, ahead of the 5.0% market consensus.
Within the division, Sports Medicine Joint Repair revenue climbed 10%, helped by continued demand for the REGENETEN Bioinductive Implant and the company’s shoulder repair portfolio.
Advanced Wound Management revenue increased 2.2%, broadly matching analyst expectations of 2.3%. However, the Advanced Wound Bioactives category declined 1.7% due to reimbursement changes affecting skin substitute products.
Full-year guidance maintained alongside new buyback programme
“First-quarter performance was in line with our expectations, with strong execution in Sports Medicine and solid performance in Advanced Wound Management and the rest of Orthopaedics offsetting the anticipated softness in US knees,” said Chief Executive Officer Deepak Nath.
Smith & Nephew maintained its full-year 2026 guidance, continuing to target underlying revenue growth of around 6%, trading profit growth of approximately 8% to roughly $1.3 billion, and free cash flow of around $800 million.
The company also unveiled a new $500 million share buyback programme, which it expects to complete within the next twelve months.
Leadership change announced in Orthopaedics division
Separately, Smith & Nephew confirmed that Nathan Folkert will join the business as President of Orthopaedics in May. He will replace Craig Gaffin, who is leaving the company to pursue another opportunity.
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