Warsaw, Indiana, April 28, 2026, 11:57 (EDT)
Zimmer Biomet dropped roughly 9% Tuesday, despite topping first-quarter expectations and bumping up its 2026 profit outlook. Investors zeroed in on a flat sales forecast, a CFO departure, and hints of pressure from a revamp of U.S. sales operations. Shares were changing hands at $84.17 late in the morning.
The selloff is significant as Zimmer works to show it can keep demand for hip and knee implants steady while overhauling its sales approach in its biggest market. Zimmer left its full-year organic constant-currency revenue growth outlook unchanged at 1% to 3%. That figure excludes currency fluctuations and, for a portion of 2026, the effects of acquiring Paragon 28.
Still, caution hung over the otherwise strong numbers. Zimmer posted net sales of $2.087 billion for the first quarter, a 9.3% increase. Adjusted earnings came in at $2.09 per share. Diluted EPS jumped 34.1% to $1.22. The company bumped its adjusted EPS outlook up to a range of $8.40 to $8.55, from its prior $8.30 to $8.45.
Zimmer is seeing a “solid start” this year, according to Chief Executive Ivan Tornos, who pointed to “healthy end markets” and growth from its latest knee and hip replacement offerings. Operating cash flow landed at $359.4 million, while free cash flow—after capex—came in at $245.9 million. Zimmer Biomet Investor Relations
Still, there was a caveat for the quarter. Tornos flagged to analysts that changes in the U.S. sales force led to some disruption—two big customer accounts, gone. The company’s U.S. knee growth didn’t hit targets either. “This is a year of transition,” he said. Reuters
The profit forecast got a lift from outside factors, too. Outgoing CFO Suketu Upadhyay told Reuters that the end of U.S. tariffs tacked on roughly 20 cents per share to earnings projections—about half of that benefit is expected in the year’s second half.
Zimmer announced that Upadhyay will step down on April 28 to pursue a new role elsewhere. Stepping in as interim CFO is Paul Stellato, currently controller and chief accounting officer, as the company kicks off a search—both internally and externally—for a long-term replacement. According to a securities filing, Upadhyay’s exit didn’t involve any disputes over the company’s financials, controls, or operations.
Stifel analysts shrugged off the management shift, saying Upadhyay exits Zimmer with finances and operations “solid” and flagged nothing worrisome about his leaving. According to MedTech Dive, he’s moving on to biopharma firm Incyte. MedTech Dive
The shakeup in sales is in its early stages. On the call, Tornos noted that just under 60% of the U.S. sales team now operate as 1099 contractors, down from roughly two-thirds at the year’s open. The proportion of specialized reps moved up to around 30%, per the transcript.
Zimmer lagged its medtech peers after the drop. Stryker, the bigger name in orthopedics, slipped roughly 1.6% by late morning; Medtronic edged down 0.7%. Johnson & Johnson, meanwhile, saw its medtech division lift the stock about 2.1%.
Zimmer’s overhaul of its sales force could drag out or eat into more business than management is budgeting for, notably in the U.S. knees segment. The company added it’s still wrapping up a fair-value review related to goodwill; first-quarter GAAP net earnings may end up different if an impairment charge comes through.
