As it relates to therapeutics, you don’t have that same challenge, right? There’s a lot of product out there still and the rollout will be slower. And you’re talking about an oral solid type of brand product, which typically does not carry very – the same type of specialization necessary in the distribution channel that does drive higher-margin products like our specialty products. And then the last question is on the long-term growth outlook. I think one of the key messages that is behind your question and behind how we think about it. And partly why we’re calling out those elements that may be a little unusual. Again, just like with GLP-1s COVID vaccines, and other form of innovation. We like innovation. It provides us new opportunities and new growth as an enterprise.
And so part of the answer to this question is, well, how do these innovative products evolve and transition over time? Is that a continued opportunity. Is it lumpy? Is this year may be higher or lower than what that volume will be in the future? That – those are all hard questions to answer. But what we saw here is a bit of an influx of innovation that we’ve been able to benefit from while using the same infrastructure. So one thing that’s really important to highlight about our performance this quarter, so we had really nice gross margin growth and we had very flat SG&A. I made the comment about the operating leverage in my comments. That’s what I’m getting at is that we were able to execute very efficiently this quarter and whether we’re talking about vaccines or other products, having that gross margin because it’s an incremental product category for us because, of course, we do not participate in that volume last year but we’re able to leverage the same capacity, the same team, that’s an efficient use of our distribution channel.
And as we get more opportunities like that, then there’s some opportunity. But one of the key things that Aaron highlighted in a number of his comments, whether it’s his comments, whether it’s his comments or his answers to the question, is that our underlying growth and we feel very good about that long-term target. And a lot of what we’ve seen here was the Q1 overperformance both from vaccines, but also just the core utilization being very strong. That’s not the same level of strength that we have indicated, we should be thinking about long-term. It’s an opportunity for us, but that’s not what we’re expecting at this point in time. And it’s not what we’re guiding for the balance of the year in terms of the core growth. We expect that core growth to still be in that 4% to 6% range.
But again, innovation can create some opportunities for us. That’s hard to see right now, but we’re not planning for that.
Aaron Alt: So maybe if I can just wrap a bow around that from a guidance perspective, just to reiterate what our guidance is look for the – as we sit here today, the Medical segment guidance is $400 million of profit for this year, and we’ve talked about that extensively, leading to $650 million of profit in fiscal year 2026. While we are pleased with the progress on Pharma, one quarter into the year and are raising our guidance for this year for Pharma, the 7% to 9% profit growth. Our longer-term algorithm remains the 4% to 6% profit growth that we had called out at our Investor Day, leading to 12% to 14% adjusted EPS growth long-term as our overall guidance. We’re not seeing changes to our long-term guidance as we sit here today.
Now some may ask, and I’ve seen in some of the headlines well, you beat by a particular amount, but your raise is a little bit less than what that amount is. And the short answer to maybe get ahead of the question is that we had above-the-line benefits for which we and below-the-line benefits relative to consensus or expectations. And the real difference between our raise and how you might do that math is just we’re not carrying forward the tax benefit that we saw in Q1 into the updated guidance for reasons I called out during my prepared remarks.
