Financial Data and Key Metrics Changes - Perrigo's organic net sales growth in Q2 2025 was flat compared to the prior year, with OTC brand growth of 3.6% [8][10] - Gross margin declined by 250 basis points, impacted by divested businesses and isolated production variability in infant formula [11][30] - EPS in the quarter grew by 7.5% or 12.5% organically, with year-to-date EPS growth exceeding 50% organically [12][34] Business Line Data and Key Metrics Changes - The infant formula business net sales grew by 9%, driven by store brand formula, while the Good Start brand experienced a significant decline due to lost distribution [6][16] - Pain and sleep aids grew by 8%, contributing positively to overall growth, while the digestive health category faced challenges due to lower consumption of proton pump inhibitors [12][14] - OTC brands delivered organic net sales growth of 3.6%, with Jungle Formula and Compie achieving significant market share gains [13][14] Market Data and Key Metrics Changes - Store brands are gaining share in volume and unit share as consumers seek value amidst economic uncertainty [10][12] - The U.S. market is experiencing declining total category consumption, while the EU is seeing decelerating consumption trends [10][11] - Perrigo's allergy product sales at a key retailer increased by almost 19% year-to-date, contrasting with a category decline of over 2% [19] Company Strategy and Development Direction - The company is focused on its 3S plan: Stabilize, Streamline, and Strengthen, with significant progress made in stabilizing the infant formula business and streamlining operations [5][26] - An agreement to sell the derma cosmetics business for up to EUR 327 million is expected to sharpen strategic focus on core high-growth brands [6][21] - The company aims to enhance its category-led market activation growth model to unlock portfolio potential and improve execution [22][23] Management's Comments on Operating Environment and Future Outlook - Management described the market as fluid and volatile, with heavy promotional activity from competitors impacting share growth expectations [44][45] - Despite challenges, the company remains confident in achieving its EPS target range of $2.9 to $3.1 per share, equating to strong double-digit growth [38][88] - Management acknowledged the slower-than-expected recovery in the infant formula business but emphasized ongoing demand generation efforts [46][84] Other Important Information - Year-to-date organic gross profit increased by 3.8%, primarily due to recovery in the infant formula business [31] - The company is on track to deliver a full-year gross margin of approximately 40% [30] - Operating cash flow for the year to date was $11 million, with cash on the balance sheet at $454 million [35][36] Q&A Session Summary Question: Insights on the infant formula market and competitor responses - Management noted that the market is fluid, with brands heavily promoting to gain share, and acknowledged that their shelf placement is not optimal at certain retailers [44][45] Question: Building blocks for achieving guidance in the second half - Management confirmed that the EPS requirement for the second half aligns with guidance, emphasizing confidence in OTC store brand growth and infant formula recovery [49][52] Question: Strategic pricing actions and retailer conversations - Management indicated that discussions with retailers regarding pricing are positive, with expectations to offset tariff impacts through pricing actions and supply chain adjustments [61][62] Question: Changes in expectations for Opill and marketing plans - Management expressed satisfaction with Opill's performance, noting double consumption growth and plans to continue investing in brand awareness [72][74] Question: Increased product scrap in infant formula and future confidence - Management clarified that the increased product scrap was an isolated issue caught by quality systems, and they are confident it will not continue to impact margins [80][82]

Core Viewpoint - Perrigo reported quarterly earnings of $0.57 per share, missing the Zacks Consensus Estimate of $0.59 per share, but showing an increase from $0.53 per share a year ago, indicating a -3.39% earnings surprise [1] - The company posted revenues of $1.06 billion for the quarter, missing the Zacks Consensus Estimate by 2.63%, and a slight decrease from $1.07 billion year-over-year [2] Financial Performance - Over the last four quarters, Perrigo has surpassed consensus EPS estimates two times [2] - The company has not been able to beat consensus revenue estimates over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.79 on revenues of $1.12 billion, and for the current fiscal year, it is $3.04 on revenues of $4.44 billion [7] Stock Performance and Outlook - Perrigo shares have increased by approximately 3.5% since the beginning of the year, compared to the S&P 500's gain of 7.1% [3] - The company's earnings outlook and management's commentary on the earnings call will be crucial for future stock price movements [3][4] - The estimate revisions trend for Perrigo was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical - Products industry, to which Perrigo belongs, is currently in the bottom 41% of over 250 Zacks industries, which may impact stock performance [8] - Another company in the same industry, Cresco Labs Inc., is expected to report a quarterly loss of $0.04 per share, with revenues projected to decline by 11.1% year-over-year [9]

Financial Performance - Net sales reached $1056 million, a decrease of 0.9% year-over-year[16] - Organic net sales experienced a slight decrease of 0.1% year-over-year[16] - Adjusted gross profit was $403 million, down 6.9% year-over-year[16] - Adjusted gross margin was 38.1%, a decrease of 250 basis points[16] - Adjusted operating income was $1352 million, down 2.9% year-over-year[16] - Adjusted EPS increased by 7.5% to $057[16] Segment Performance - Consumer Self-Care Americas (CSCA) net sales decreased by 1.9% year-over-year to $622 million[43] - Consumer Self-Care International (CSCI) net sales increased by 0.7% year-over-year to $4343 million[43] - Perrigo OTC brands grew by 3.6%, while Perrigo OTC store brands decreased by 3.2%[19] Strategic Initiatives - Infant formula net sales increased by 9% year-over-year[14] - Store brand and contract infant formula net sales increased by 32% year-over-year[26] - Project Energize is expected to deliver $159 million in annual run rate gross savings[30] - Supply Chain Reinvention is expected to generate total benefits between $150-$200 million by the end of 2025[30] - The sale of the Dermacosmetics business is expected to close in Q1 2026, with proceeds prioritized for accelerating net leverage goals[30, 52]

Financial Performance - Net sales for Q2 2025 were $1.06 billion, down 0.9% year-over-year, impacted by divestitures and exited products (-2.5%) and a slight decline in organic net sales (-0.1%) [3] - Adjusted EPS for Q2 2025 was $0.57, up 7.5% year-over-year, driven by lower interest expense from reduced debt, despite a $0.05 headwind from divestitures [25] - Reported operating income improved to $45 million from a loss of $27 million in the prior year, with an operating margin of 4.3%, an increase of 680 basis points year-over-year [23] - The company experienced a net loss of $1 million in Q2 2025, an improvement from a net loss of $106 million in the prior year [25] - Reported gross profit decreased by 8.1% to $363 million, with an adjusted gross margin of 38.1%, down 250 basis points year-over-year [21] - Reported operating income fell to $45 million, a decrease of $24 million or 34.9%, while adjusted operating income was $71 million, down 22.2% [30] - The company reported a net loss of $8.4 million for the three months ended June 28, 2025, compared to a net loss of $108.4 million for the same period in 2024 [65] - For the six months ended June 28, 2025, the net income was a loss of $14.8 million, compared to a loss of $106.4 million for the same period in 2024 [70] - Adjusted diluted earnings per share for the three months ended June 28, 2025, were $(0.06), improving from $(0.79) in the prior year [65] - Reported diluted loss per share for the six months ended June 28, 2025, was $(0.4), while adjusted diluted earnings per share were $1.17 [78] Sales and Revenue - Consumer Self-Care Americas segment reported net sales of $1.06 billion, down 1.9% year-over-year, with organic net sales also declining by 1.9% [26] - CSCA net sales for Q2 2025 were $622 million, a decline of $12 million or 1.9% year-over-year [29] - CSCI net sales increased by 0.7% to $434 million, driven by organic growth of 2.7% and favorable currency translation of 4.2% [36] - Reported net sales for the three months ended June 28, 2025, were $1,056.3 million, a slight decrease from $1,065.5 million for the same period in 2024 [72] - Reported net sales for the six months ended June 28, 2025, were $2,100.2 million, a decrease of 2.2% compared to $2,147.5 million for the same period in 2024 [78] - The net sales for Consumer Self-Care International were $857.4 million for the six months ended June 28, 2025, down 1.4% from $869.3 million in the prior year [100] - Organic net sales for the consolidated operations were $2,094.7 million for the six months ended June 28, 2025, reflecting a decrease of 0.3% compared to $2,100.1 million in the prior year [102] Cost and Expenses - The company estimates a gross increase to global cost of goods sold in 2025 of approximately $10 million to $20 million starting in Q4 [46] - The company incurred restructuring charges of $35.0 million for the six months ended June 28, 2025, slightly down from $38.3 million in the same period of 2024 [70] - The company incurred $70.0 million in amortization expenses related to acquired intangible assets during the six months ended June 28, 2025 [78] - The company recorded a total impairment charge of $3.1 million during the six months ended June 28, 2025, including a goodwill impairment charge of $1.2 million [79] - The total impairment charge for the three months ended June 28, 2025, was $1.5 million, compared to $34.1 million in the same quarter of 2024 [73] Strategic Initiatives - Project Energize is expected to deliver annualized pre-tax savings of $140 million to $170 million by the end of 2026, with gross annual savings of approximately $159 million achieved since its launch [13] - The sale of the Dermacosmetics business is expected to close in Q1 2026, with net proceeds aimed at strengthening the balance sheet and accelerating net leverage goals [11] - The company expects to continue experiencing restructuring-related charges as part of its strategic initiatives, impacting future financial performance [58] Cash Flow and Balance Sheet - Year-to-date operating cash flow was $11 million, with a cash inflow of $76 million in Q2 2025 [42] - Total debt on the balance sheet as of June 28, 2025, was $3.65 billion, with cash and cash equivalents at $454 million [44] - Cash and cash equivalents decreased to $454.2 million from $558.8 million at the end of 2024, reflecting a tighter liquidity position [68] - The company experienced a net decrease in cash and cash equivalents of $104.6 million, compared to a decrease of $208.5 million in the prior year [70] Tax and Non-GAAP Measures - Non-GAAP tax adjustments for the three months ended June 28, 2025, included $13.9 million of tax expense on pre-tax non-GAAP adjustments [92] - The effective tax rate for the six months ended June 28, 2025, was 103.6%, compared to 41.1% for the same period in 2024 [93] - The adjusted effective tax rate for the six months ended June 28, 2025, was 20.4%, compared to 20.2% for the same period in 2024 [93] - Management emphasizes the importance of non-GAAP measures to provide transparency and assess ongoing operational trends, which may assist investors in evaluating the company's performance [59]

Core Insights - The company has advanced its 'Three-S' strategic plan (Stabilize, Streamline, and Strengthen) through the sale of its Dermacosmetics business, scaling its global operating growth model, and enhancing brand building capabilities, which are yielding positive results [1][6][8] - The company reaffirms its full-year 2025 adjusted EPS target range of $2.90 to $3.10 despite challenging market consumption trends [1][39] Financial Performance - Second Quarter 2025 net sales were $1.06 billion, a decrease of 0.9% year-over-year, impacted by divestitures and exited products [7][13] - Reported operating income was $45 million, compared to a loss of $27 million in the prior year, while adjusted operating income decreased by 2.9% to $135 million [7][17] - Diluted EPS improved to $0.00 from $(0.77) in the prior year, with adjusted EPS at $0.57, reflecting a 7.5% increase [19][12] Segment Performance - Consumer Self-Care Americas (CSCA) net sales were $622 million, down 1.9%, with growth in Nutrition and Upper Respiratory categories offset by declines in Digestive Health and Oral Care [21][22] - Consumer Self-Care International (CSCI) net sales increased by 0.7% to $434 million, driven by Pain & Sleep Aids and Upper Respiratory categories, despite a negative impact from divestitures [27][28] Strategic Initiatives - Project Energize, launched in Q1 2024, aims to enhance organizational agility and is expected to deliver annualized pre-tax savings of $140 million to $170 million by the end of 2026 [9][10] - The company anticipates that the sale of the Dermacosmetics business will strengthen its balance sheet and accelerate net leverage goals [8][39] Cash Flow and Balance Sheet - Year-to-date operating cash flow was $11 million, with cash inflow of $76 million in Q2 2025, and cash and cash equivalents on the balance sheet were $454 million as of June 28, 2025 [33][34] - Total debt on the balance sheet was $3.65 billion [34] Market Outlook - The company expects reported and organic net sales growth to be towards the lower end of their respective ranges for 2025, primarily due to infant formula industry dynamics and challenging market consumption trends [39][44] - The company believes its unique business model and extensive product offerings position it well to adapt to changing consumer behaviors and market conditions [37][39]

Core Viewpoint - Perrigo (PRGO) shows potential for significant upside, with a mean price target of $36.67 indicating a 36% increase from the current trading price of $26.96 [1] Price Targets - The average price target consists of three estimates ranging from a low of $30.00 to a high of $42.00, with a standard deviation of $6.11, suggesting variability in analyst predictions [2] - The lowest estimate indicates an 11.3% increase, while the highest suggests a 55.8% upside [2] - A low standard deviation indicates a higher agreement among analysts regarding price movement [9] Analyst Sentiment - Analysts are increasingly optimistic about PRGO's earnings prospects, as evidenced by upward revisions in EPS estimates [11] - The Zacks Consensus Estimate for the current year has risen by 0.3% over the past month, with one estimate increasing and no negative revisions [12] - PRGO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be prudent, as analysts' ability to set accurate targets has been questioned [3][7] - Analysts often set optimistic price targets due to business incentives, which can lead to inflated estimates [8] - While price targets should not be ignored, they should be approached with skepticism and not be the sole basis for investment decisions [10]

Core Viewpoint - Perrigo Company plc (PRGO) is set to report its second-quarter 2025 earnings on August 6, with expectations of sales at $1.08 billion and earnings per share (EPS) at 59 cents, following a previous earnings surprise of 7.14% [1][7]. Group 1: Upcoming Earnings Expectations - The Zacks Consensus Estimate for sales in the Consumer Self Care Americas (CSCA) segment is $636 million, while the model estimate is $641 million. For the Consumer Self Care International (CSCI) segment, the estimates are $445 million and $439 million, respectively [3]. - Sales in the second quarter are anticipated to be affected by exited businesses, product line reductions, and unfavorable currency movements [2][7]. Group 2: Strategic Developments - Investors are looking for updates on the deal with KKR-backed Kairos Bidco AB regarding the sale of Perrigo's Dermacosmetics-branded business for up to €327 million, as well as insights on the expected impact of macroeconomic pressures in future quarters [4][7]. Group 3: Earnings Performance History - Perrigo has shown a decent earnings performance over the last four quarters, beating estimates in three of those quarters and missing once, resulting in an average surprise of 4.36% [5].

Company Overview - Perrigo Company plc is a leading pure-play self-care company with over a century of experience in providing high-quality health and wellness solutions primarily in North America and Europe [2] - The company is a pioneer in the over-the-counter (OTC) self-care market, offering trusted self-care solutions that do not require a prescription, ensuring accessibility and choice for consumers [2] Business Model - Perrigo's unique business model leverages complementary businesses, where cash-generative store brand private label offerings fuel investments for leading brands such as Opill®, Mederma®, Compeed®, EllaOne®, and Jungle Formula® [3] Upcoming Events - The President and CEO Patrick Lockwood-Taylor and CFO Eduardo Bezerra are scheduled to present at the Canaccord Genuity 45th Annual Growth Conference on August 12th at 9:00 AM EDT [1]

Core Viewpoint - Perrigo Company plc is set to release its second quarter 2025 financial results on August 6, 2025, and will host a conference call to discuss these results [1] Company Overview - Perrigo Company plc is a leading provider of Consumer Self-Care Products with over a century of experience in delivering high-quality health and wellness solutions primarily in North America and Europe [3] - The company is a pioneer in the over-the-counter (OTC) self-care market, offering accessible self-care solutions that do not require a prescription [3] Business Model - Perrigo's business model is characterized by its complementary businesses, where cash-generative store brand private label offerings support investments in leading brands such as Opill®, Mederma®, Compeed®, EllaOne®, and Jungle Formula® [4]

Core Viewpoint - Perrigo (PRGO) shares have increased by 2.9% over the past four weeks, closing at $27.09, with a mean price target of $36.67 indicating a potential upside of 35.4% [1] Price Targets - The average price target consists of three short-term estimates ranging from a low of $30.00 to a high of $42.00, with a standard deviation of $6.11, suggesting a potential increase of 10.7% to 55% from the current price [2] - A low standard deviation indicates a strong agreement among analysts regarding the price targets, which can be a useful metric for investors [2][9] Analyst Sentiment - Analysts show strong agreement in revising earnings estimates higher for PRGO, which is a positive indicator for potential stock upside [4][11] - The Zacks Consensus Estimate for the current year has increased by 0.3% over the past month, with no negative revisions, reflecting growing optimism [12] Zacks Rank - PRGO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, which supports the stock's potential upside [13] Conclusion on Price Targets - While the consensus price target may not be a reliable indicator of the exact price movement, it does provide a directional guide for potential stock performance [14]