Shares in Ansell Ltd (ASX: ANN) surged on Tuesday after the personal protective equipment manufacturer delivered a better-than-expected trading update and raised its earnings outlook at its 2025 Annual General Meeting.
At the time of writing, the Ansell share price is up 6% to $36.48, with the market reacting strongly after the company raised its guidance.
Trading update
Management now expects FY26 adjusted earnings per share of US$1.37 to US$1.49, up from the previously provided range of US$1.33 to US$1.45.
The upgrade follows a solid start to the financial year for Ansell, with management reporting sales and margins tracking ahead of plan, buoyed by favourable foreign-exchange trends, lower freight costs, synergy gains from its Kimberly-Clark PPE business acquisition, and ongoing manufacturing productivity improvements
Whilst US tariffs have been a hot topic this year, Ansell has found ways to manage this shift by increasing its prices and reducing its sourcing from China, which faces higher US tariffs. Management's goal is to fully offset the impact of the tariffs through a range of measures designed to protect the bottom line.
Ansell also reported solid productivity gains as its Accelerated Productivity Investment Program (APIP) continues to deliver results. The program has generated $47 million in cost savings so far in FY25, and management is targeting $50 million in cost savings for FY26. The company is also investing in a new enterprise resource planning (ERP) system to streamline operations and unlock digital efficiencies.
The integration of Kimberly-Clark's PPE business (KBU) (Ansell's largest-ever acquisition) was completed ahead of schedule, achieving $5 million in cost synergies and prompting a lift in its FY27 synergy target from $10 million to $15 million.
Ansell also reaffirmed its $200 million on-market share buyback, with $29 million completed so far this year to date.
Foolish bottom line
After a few years of losing ground following the COVID pandemic hype, Ansell is a business that is finally finding its footing. Favourable exchange rates may have contributed to this positive trading update, but this is more than just luck.
The company is creating its own luck through disciplined price increases and operational efficiency gains. With tariff risks under control, synergies running ahead of plan, and earnings guidance upgraded, Ansell's 6% share price jump is earned.
Ansell shares are now up 30% from their tariffs-related lows from earlier this year, and investor confidence is growing once again. It looks like full steam ahead for Ansell.
