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Did Perrigo beat or miss consensus estimates last quarter?

- **Share Gains Highlight Resilience**: U.S. OTC volume share +90bps, EU key brands gain dollar share for 5 straight months despite soft category trends.
- **Strategic Adjustments**: Paused $240M Infant Formula investment; reviewing Oral Care and Dermacosmetics divestiture impact. 2025 sales outlook revised to -2% to -2.5% due to slower recovery.
- **Financial Discipline**: Year-to-date EPS +21% to $1.97, driven by $163M Project Energize savings. 2025 EPS guidance $2.70-$2.80 (+5% to +9%).
- **2026 Outlook**: Focus on OTC share growth and innovation; Infant Formula faces headwinds but strategic review underway.

**【CEO Summary Section】**
- Perrigo delivered sustained share gains in U.S. and EU OTC despite soft category consumption. U.S. store brand OTC volume share increased 90 basis points over 13 weeks, with gains in smoking cessation, allergy, and women's health categories. EU key brands (e.g., ellaOne, Jungle Formula) gained dollar share for 5 consecutive months.
- Strategic reviews of Infant Formula and Oral Care businesses announced. Infant Formula share recovery slower than expected, with U.S. store brand share at 16% vs. target of low 20s by year-end. Project Energize delivered $163M in annual savings, exceeding midpoint of $140M-$170M range.
- 2025 organic net sales outlook revised to -2% to -2.5% due to softer-than-expected OTC consumption and slower Infant Formula recovery. Year-to-date EPS grew 21% to $1.97, driven by cost management and accretive initiatives.

**【CFO Financial Commentary】**
- Q3 2025: Organic net sales declined 4.4% (U.S. OTC +0.6%, offset by -2.8% from businesses under review). Gross profit $417M (-$30M YoY), operating income $173M (-$9M YoY). EPS $0.80, flat YoY. Year-to-date: Organic operating income +13.2%, EPS +21%.
- 2025 Outlook: Organic net sales -2% to -2.5%, gross margin ~39%, operating margin ~15%, EPS $2.70-$2.80 (+5% to +9% YoY). Q4 expectations: Flat to +1% organic growth in global OTC, down in Nutrition due to contract volume lapping.

**【Q&A Highlights】**
- **Infant Formula Share & SKUs**: U.S. store brand share 16%, below target due to competitive imports and slower velocity on new SKUs. Distribution per plan but shelf space allocation suboptimal.
- **OTC Consumption Trends**: Q3 U.S. OTC volume declined 3.2%, EU +0.6% (vs. +700/500 basis points expected). Drivers seen as transitory, not structural. Q4 expects flat to +1% growth, driven by cough/cold seasonality.
- **2026 Outlook**: OTC market stabilization expected; Infant Formula faces headwinds from foreign imports and stranded costs post-Dermacosmetics sale. Innovation pipeline strengthening for U.S. OTC and EU brands.

Perrigo Company plc (PRGO) Q3 2025 Earnings Call Transcript

- **EPS Growth Confirmed**: 2025 EPS target reaffirmed at $2.90-$3.10, with 60% of growth in H2 driven by OTC store brand wins and infant formula recovery.
- **Infant Formula Recovery**: H2 net sales expected to grow 25% vs. H1, despite slower-than-expected share gains due to new SKUs and competitor promotions.
- **Cost Management**: $159M annualized savings from Project Energize, offsetting $50M-$60M tariff impact via pricing and supply chain efficiency.
- **OTC Momentum**: Store brand OTC share growing 6x faster than market, Jungle Formula and Compeed achieve record market share, allergy campaign drives 19% sales growth at a top customer.

**【CEO Summary Section】**
- **Three-S Plan Progress**: Stabilized infant formula sales grew 9% YoY, driven by store brand and contract business. U.S. OTC store brand new business awards exceeded lost distribution for the first time. Project Energize and Supply Chain Reinvention delivered $159M in annualized savings. Sale of Dermacosmetics business (up to €327M) to strengthen balance sheet and focus on core portfolio.
- **Financial Highlights**: Organic EPS up 53.3% YoY to $1.17, driven by infant formula recovery and cost savings. 2025 EPS target reaffirmed at $2.90-$3.10, with 60% of growth expected in H2.
- **Market Trends**: Store brand OTC gaining share (6x faster than total market), Jungle Formula and Compeed achieved record market share. Infant formula recovery slower than expected, with 20% of 2025 SKUs yet to launch.

**【CFO Financial Commentary】**
- **Q2 Results**: GAAP net income $420M, Non-GAAP EPS $0.57 (+7.5% YoY). Organic operating income up 28.3% YoY to $282M. Gross margin 39.5% (down 250bps YoY) due to infant formula scrap ($11M) and lower overhead absorption.
- **Balance Sheet**: Cash $454M, net leverage 3.9x (target 3.5x by year-end). 2025 operating cash flow conversion target of 100% to adjusted net income.
- **Tariff Impact**: Q4 COGS increase $10M-$20M, full year $50M-$60M (2% of COGS). Offset via pricing, in-sourcing, and supply chain actions.

**【Q&A Highlights】**
- **Infant Formula Recovery**: H2 net sales expected to grow 25% vs. H1, with 20% of SKUs launching and demand generation campaigns. Scrap issue resolved, no recurrence expected.
- **OTC Growth**: 75% of H2 top-line growth from OTC store brand wins and cough/cold season. Allianz allergy campaign drove 19% sales growth at a top customer.
- **Tariff Strategy**: 2/3 of cost increases offset by pricing, 1/3 by supply chain. Retailers accepting price adjustments for OTC and Oral Care products.
- **Long-Term Outlook**: Opill repeat rate 55%, targeting $100M+ in women's health. Focus on U.S. OTC growth, infant formula stabilization, and margin expansion.

Perrigo Company plc (PRGO) Q2 2025 Earnings Call Transcript

- **Infant Formula Recovery**: Q1 sales up 19% YoY, with 60 new SKUs and shelf resets driving H2 acceleration.
- **OTC Brand Momentum**: 5.9% organic growth in OTC brands, outpacing industry trends.
- **Tariff Mitigation**: 100% offset of tariff impacts via pricing, in-sourcing, and alternative suppliers.
- **International Expansion**: International OI at $86M (vs. Americas $100M), with Europe leading at 6% growth.
- **2025 Guidance**: EPS target reaffirmed ($2.90-3.10), with 60% of earnings in H2.

**【CEO Opening Remarks】**
- **Three-S Plan Progress**: Stabilization efforts in Americas business offset lost distribution, with infant formula net sales up 19% YoY. Streamlining initiatives (e.g., Project Energize) delivered $20M in Q1 savings, bringing total annual run rate to $159M. Global service levels improved to 94%.
- **OTC Brand Growth**: Excluding prior-year Opill stocking, OTC brands achieved 5.9% organic growth, driven by ellaOne, Nasonex, and Compeed. New business awards expected to turn top-line headwinds into growth from Q2 2025.
- **Macro Risks & Opportunities**: Consumer caution due to inflation and tariffs; U.S. OTC store brand volume gained 50bps in 4 weeks. Tariffs expected to add 1% to COGS in 2025, partially offset by price actions and in-sourcing.

**【CFO Financial Highlights】**
- **Q1 Results**: Adjusted EPS of $0.60 (+107% YoY), driven by infant formula recovery and $8M supply chain savings. Gross margin expanded 440bps to 41%, operating margin +550bps.
- **Tariff Mitigation**: $145-155M COGS increase from tariffs; 80% impacting oral care (China-sourced inputs). Actions include pausing China orders, in-sourcing to U.S. facilities, and new supply routes.
- **2025 Outlook**: Widened net sales range (0-3% reported, 1.5-4.5% organic) to reflect macro uncertainty. Reaffirmed EPS target of $2.90-3.10, with 60% of annual earnings expected in H2.

**【Q&A Key Takeaways】**
- **Infant Formula Recovery**: Q1 sales $105M (+19% YoY); new SKUs and shelf resets expected to accelerate share gains. 2025 phasing: ~50% growth in H1, 50% in H2.
- **Contract Manufacturing**: Increased inquiries from competitors seeking U.S. manufacturing; FDA comments support domestic infant formula capacity.
- **Tariff Impact**: 2026 EPS unaffected by current mitigation plans. Oral care price actions to begin Q3; pharma-specific tariffs could add $100M COGS, offset via pricing and API sourcing.
- **International Growth**: International OTC brands grew 5.9% organically, with Europe leading at 6% growth. International OI reached $86M (vs. Americas $100M), narrowing gap.


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