Smith+Nephew Q1 2026: In Line with Expectations, Announces $500M Buyback

Sports Medicine leads the way in Smith+Nephew Q1 results

The strongest area was Sports Medicine & ENT, with revenue of $491 million and underlying growth of 6.7%. Strip out the weaker ENT business and Sports Medicine itself looked very healthy, helped by shoulder repair products and arthroscopic tools.

Management highlighted double-digit growth from products including REGENETEN, Q-FIX KNOTLESS, and strong progress from the CARTIHEAL AGILI-C Cartilage Repair Implant. The recently acquired Integrity Orthopaedics business is also being integrated as planned, which is important because it strengthens Smith+Nephew’s shoulder offering.

One telling comment from the chief executive was that Sports Medicine is now larger than Orthopaedic Reconstruction and Robotics. That says a lot about where the business is finding momentum.

ENT was the weak spot here, with underlying revenue down 9.4%. That was expected and linked to reducing channel inventory in China ahead of volume-based procurement, a pricing and purchasing process that can hit suppliers.

Advanced Wound Management is holding up, but skin substitutes are still a drag

Advanced Wound Management generated $411 million of revenue, with underlying growth of 2.2%. That is decent rather than dazzling, and the main issue remains the reimbursement reset for skin substitutes in the US.

Advanced Wound Bioactives slipped 1.7% on an underlying basis, with Smith+Nephew pointing to lower volumes, pricing pressure in non-surgical settings, reduced billing efficiency and elevated inventory clearing. None of that is ideal, but the important point is that management says the impact is still in line with expectations.

Elsewhere, there were some brighter patches. Advanced Wound Care grew 4.9% underlying, helped by ALLEVYN LIFE, while PICO negative pressure wound therapy and the LEAF patient monitoring system both performed well. The launch of ALLEVYN COMPLETE CARE in the US is also going well, with Europe due to follow in the second quarter.

Orthopaedics growth is patchy as US Knee Implants remain the problem child

Orthopaedics brought in $599 million, but underlying growth was just 0.8%. That is the softest of the three main divisions, and the reason is clear enough: US Knee Implants are still under pressure.

US Knee Implants fell 10.3%. Management says this is a deliberate trade-off as it focuses on better quality business, disciplined set placement and preparation for the launch of the new LANDMARK Knee System, including a cementless version expected in the third quarter of 2026.

That explanation is plausible, but investors should still treat this as the main operational watchpoint. A double-digit decline in such an important category is hard to ignore, even if the company believes the trend will improve later this year.

The better news is that other parts of Orthopaedics are doing their share. Hip Implants rose 4.1% underlying, helped by the CATALYSTEM Primary Hip System, while Trauma & Extremities grew 2.4% and the AETOS Shoulder System delivered double-digit growth. Outside the US, Knee Implants were much stronger, up 6.0% underlying.

Geographic performance shows China is becoming less of a headache

In the US, revenue was $775 million with underlying growth of 2.1%. Other Established Markets delivered $469 million and grew 1.0% underlying. Emerging Markets were the standout, with revenue of $257 million and underlying growth of 10.5%.

China was a key driver in Emerging Markets, and management said it expects 2026 to be the first year since 2021 that China will not be a major headwind to group revenue growth. That is an encouraging line, because China has been a recurring source of pressure for many medical technology businesses.

Full-year 2026 guidance unchanged is the real anchor for the investment case

The market will probably care most about what did not happen here: there was no downgrade. Smith+Nephew still expects around 6% underlying revenue growth for 2026, around 7.7% reported revenue growth based on exchange rates prevailing on 1 May 2026, around 8% organic trading profit growth, around $800 million of free cash flow, and greater than 10% adjusted return on invested capital, or ROIC, excluding the impact of Integrity Orthopaedics.

Including the acquisition dilution, trading profit is expected to be around $1.3 billion. That suggests management still sees plenty of progress ahead, even after allowing for around $60 million of tariff impact and a further $20 million to $40 million hit from the skin substitutes reimbursement reset.

The catch is timing. Smith+Nephew again said growth will be weighted towards the second half, helped by product launches, stabilisation in skin substitutes, improvement in US knees, and an extra trading day in the fourth quarter. Investors will want to see that second-half acceleration actually show up, because for now it remains a promise rather than proof.

My verdict on the Smith+Nephew Q1 2026 update

This was a positive update overall. The buyback is a clear vote of confidence, Sports Medicine is in very good shape, Emerging Markets are strong, and full-year targets are intact.

The negatives are not trivial. US Knee Implants are weak, skin substitutes remain messy, and first-quarter underlying growth of 3.1% is well below the roughly 6% targeted for the year. Even so, this feels like a business that is managing through its softer spots rather than one slipping off course.

For retail investors, the takeaway is fairly straightforward. Smith+Nephew is not firing on every cylinder, but it is still generating enough cash, product momentum and management confidence to keep guidance unchanged and return another $500 million to shareholders. In this kind of market, that is worth paying attention to.