CLAIM #40473 · Medtronic PLC (MDT) · 2024Q3 earnings call · Feb 20, 2024 · due Apr 30, 2025
“The other you asked about is cost goods sold productivity, and the answer, the short answer to your question is, yes, we do think it's sustainable, we've got lots of opportunity here.”
Geoff Martha · CEO
In context
“indexed on clinical value. And more recently, we keep that focus and then add the health economics, and it's getting paid for. And we're I think doing a better job of making those points and getting that pricing and I do think it's durable. So the pricing has increased, I'd say, for the company overall, 200 basis points or so relative to the past, and I think we're going to keep pushing for even more. On the converse, if you don't have the innovation, be prepared for that as well because I think hospitals have gotten more sophisticated and purchasing, and your price is going to pay for that if you're not keeping up with the innovation. But given where we are on the product cycles and giving us pricing muscle, we feel good about that being incremental especially to the historical baseline. The other you asked about is cost goods sold productivity, and the answer, the short answer to your question is, yes, we do think it's sustainable, we've got lots of opportunity here. Can you think about it, we have this pretty big footprint of factories and distribution centers and too many suppliers I have said in the past. Now with Greg Smith coming in a couple of years ago and we've centralized that, we can take a strategic look across that portfolio. And we have a long list of cost-down programs. And then we've ensured that we've effectively contracted those between our global operations supply-chain team and our operating units, because it takes release product engineering to make sure that these cost programs can happen in our operating unit. So we feel good about that, and we feel that that's sustainable. So those are two big changes that impact positively gross margins now and into the future. And speaking in the future, I'll turn it over to Karen to talk abou”
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SEC filings for MDT ↗ · Claim quote is verbatim from the 2024Q3 earnings call.