Core Insights - The performance of Perrigo's international operations is critical for understanding its financial resilience and growth potential [1][2][3] Revenue Performance - Perrigo's total revenue for the quarter was $1.04 billion, reflecting a year-over-year decline of 3.5% [4] - Revenue from "All other countries" was $22.3 million, accounting for 2.14% of total revenue, which was a significant surprise of -39.23% compared to the expected $36.7 million [5] - Europe contributed $412.3 million, representing 39.50% of total revenue, exceeding the consensus estimate of $378.66 million by +8.89% [6] Future Revenue Expectations - Analysts anticipate Perrigo will report total revenue of $1.08 billion for the current fiscal quarter, indicating a 1.5% increase year-over-year [7] - For the full year, total revenue is expected to reach $4.43 billion, up 1.3% from the previous year, with contributions from "All other countries" and Europe projected at 3.4% ($148.49 million) and 34.5% ($1.53 billion), respectively [8] Strategic Considerations - The reliance on global markets for revenue presents both opportunities and challenges for Perrigo, making the analysis of international revenue trends essential for forecasting future performance [9][10]

Core Insights - Perrigo (PRGO) reported adjusted earnings of 60 cents per share for Q1 2025, exceeding the Zacks Consensus Estimate of 56 cents, marking a 107% year-over-year increase driven by improved margins and lower variable expenses [1] - Net sales for the quarter declined 3.5% year over year to $1.04 billion, falling short of the Zacks Consensus Estimate of $1.08 billion, primarily due to exited businesses, product lines, and unfavorable currency movements [1][2] Financial Performance - Sales dropped 2% year over year due to exited businesses and product lines, with an additional 1.2% decline attributed to unfavorable currency movements; at constant currency, sales fell 2.4% [2] - Organic net sales decreased by 0.4%, indicating a slight decline in core business performance [2] Segment Analysis - **Consumer Self Care Americas (CSCA)**: Reported net sales of $621 million, down 3.6% year over year; growth in Nutrition and Upper Respiratory categories was offset by lost distribution in U.S. Store Brand and lower sales in Digestive Health [4] - **Consumer Self Care International (CSCI)**: Reported net sales of $423 million, down 3.4% year over year; organic sales increased by 4.5%, but overall sales were impacted by divested businesses and currency translation [5] Guidance and Outlook - Perrigo widened its full-year sales outlook to a growth range of 0-3% year over year, compared to the previous guidance of 1-3%, due to macroeconomic uncertainties including potential new tariffs [6] - The company plans to manage cost increases from tariffs, particularly in the Oral Care segment, through price adjustments and shifting production to domestic facilities [7] Stock Performance - Year to date, Perrigo shares have declined by 4%, contrasting with the industry’s 4% growth [8]

Financial Data and Key Metrics Changes - Organic net sales declined by 0.4%, but excluding lost distribution and prior year effects, organic net sales grew by 1.8% year over year [16][25] - Gross margin expanded by 440 basis points year over year to 41%, driven by business recovery in infant formula [16][25] - First quarter EPS increased by 107% year over year to $0.60 per share [16][28] Business Line Data and Key Metrics Changes - Infant formula net sales increased by 19% compared to the same quarter last year, contributing to overall recovery [7][19] - OTC brands achieved solid organic growth of 5.9% year over year, driven by strong sales of key products [10] - Operating income in the CSCI segment grew by 10% organically, while CSEA operating income grew by 90% due to infant formula recovery [27] Market Data and Key Metrics Changes - Dollar sales across self-care categories turned negative compared to the prior year, reflecting cautious consumer behavior due to inflation and reduced consumer confidence [11][12] - Total US OTC store brand volume gained 50 basis points over the last four weeks, indicating a shift in consumer buying patterns towards value-oriented products [15] Company Strategy and Development Direction - The company is focused on its 3S plan: stabilize, streamline, and strengthen, with positive results from stabilizing key parts of the business [6][21] - The synergistic relationship between store brand and OTC brands is being leveraged to drive growth, with substantial cash flow generated from store brands [10] - The company is enhancing its new product development process to create a more efficient pipeline [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but expressed confidence in the company's positioning to navigate these challenges [12][22] - The company is widening its 2025 net sales projections due to macroeconomic uncertainties while reaffirming its adjusted EPS range [12][30] - Management expects a significant ramp-up in infant formula sales in the second half of the year due to new product introductions [39] Other Important Information - The company plans to offset tariff-related cost increases through strategic pricing actions and sourcing more manufacturing to US facilities [14][30] - The gross increase in global cost of goods sold from tariffs is expected to be approximately 5.5% for the full year [32] Q&A Session Summary Question: Impact of tariffs on EPS for 2026 - Management expects that actions taken to mitigate tariff impacts will offset any major changes in EPS projections for 2025 and beyond [36][37] Question: Sales ramp for infant formula - Management anticipates a similar sales trajectory in Q2, with significant growth expected in the second half due to new SKU introductions [38][39] Question: Contract manufacturing activity - There is an increase in activity for contract manufacturing as competitors seek domestic supply routes [44] Question: Organic sales performance - Organic sales were broadly in line with expectations, with upper respiratory products performing well despite some regional variances [48][49] Question: Gross margin expectations - Management maintains a full-year gross margin expectation of around 40%, despite better-than-expected Q1 performance [52][53] Question: Widening net sales range - The widening range reflects dynamic shifts in consumer behavior and ongoing opportunities in the market [60][62] Question: Pharma-specific tariffs impact - Management anticipates a potential $100 million impact from pharma-specific tariffs, with plans to mitigate through pricing and sourcing strategies [84][85]

Financial Data and Key Metrics Changes - Organic net sales declined by 0.4%, but excluding lost distribution and prior year effects, organic net sales grew by 1.8% year over year [16][17] - Gross margin expanded by 440 basis points year over year to 41%, driven by business recovery in infant formula [16][26] - Operating margin expanded by 550 basis points, supported by gross margin flow through and benefits from Project Energize [17][26] - First quarter EPS increased by 107% year over year to $0.60 per share [17][29] Business Line Data and Key Metrics Changes - In the Americas business, store brand OTC saw new business awards that largely offset previous losses, with infant formula net sales increasing by 19% year over year [5][20] - OTC brands achieved solid organic growth of 5.9% year over year, driven by strong sales of key products [8] - CSCI segment reported organic net sales growth of 4.5%, while CSCA segment net sales declined by 3.6% due to lost distribution [27] Market Data and Key Metrics Changes - Dollar sales across self-care categories turned negative compared to the prior year, reflecting cautious consumer behavior due to inflation and reduced consumer confidence [10][14] - Total US OTC store brand volume gained 50 basis points over the last four weeks, indicating a shift in consumer buying patterns towards value-oriented products [15] Company Strategy and Development Direction - The company is focused on its 3S plan to stabilize, streamline, and strengthen operations, with significant progress reported in the Americas business [5][22] - The synergistic relationship between store brand and OTC brands is being leveraged to drive growth, with investments in high-growth brands expected to yield benefits in the second half of the year [8][9] - The company is navigating macroeconomic uncertainties while reaffirming its adjusted EPS range and net leverage targets [11][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but expressed confidence in the company's unique business model to capitalize on growth opportunities [14][23] - The company expects to mitigate tariff-related cost increases through strategic pricing actions and sourcing adjustments [13][31] - Future sales growth projections have been widened to account for macroeconomic risks, with expectations of 3% to 4.5% organic growth [31][32] Other Important Information - The company reported a cash balance of $410 million at the end of the first quarter, with typical cash outflow patterns observed [29] - The international business showed strong performance, with mid-single-digit sales growth and double-digit profit growth [88][90] Q&A Session Summary Question: Impact of tariffs on EPS for 2026 - Management expects actions taken to mitigate tariff impacts will offset any significant changes in EPS projections for 2025 and 2026 [36][37] Question: Sales ramp for infant formula - Management anticipates a similar sales trajectory in Q2, with significant growth expected in the second half due to new SKU introductions [38][39] Question: Contract manufacturing activity - There is an increase in activity for contract manufacturing, with competitors seeking domestic supply routes [42][43] Question: Organic sales performance - Organic sales were broadly in line with expectations, with upper respiratory products performing well despite some regional variances [46][48] Question: Gross margin expectations - Management maintains a full-year gross margin expectation of around 40%, despite better-than-expected Q1 performance [51][52] Question: Widening net sales range - The widening range reflects dynamic consumer patterns and ongoing work to capture market opportunities [56][62] Question: Pricing actions and brand divestitures - Pricing adjustments are being discussed with retailers, and progress on brand divestitures is ongoing, with a focus on international opportunities [70][73] Question: Impact of pharma-specific tariffs - Management anticipates potential impacts from pharma tariffs but has a mitigation plan in place [84][85]

分组1 - Perrigo reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.56 per share, and showing an increase from $0.29 per share a year ago, representing an earnings surprise of 7.14% [1] - The company posted revenues of $1.04 billion for the quarter ended March 2025, which was 3.59% below the Zacks Consensus Estimate and a decrease from $1.08 billion in the same quarter last year [2] - Over the last four quarters, Perrigo has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $1.08 billion, and for the current fiscal year, it is $2.98 on revenues of $4.42 billion [7] - The Zacks Industry Rank indicates that the Medical - Products sector is currently in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Perrigo shares have declined about 4% since the beginning of the year, slightly outperforming the S&P 500's decline of 4.7% [3]

Financial Performance - Q1 2025 - Net sales were $1044 million, a decrease of 3.5% year-over-year (YoY), with organic net sales decreasing by 0.4%[30] - Adjusted gross profit increased by 8.1% YoY to $428 million, with adjusted gross margin at 41.0%, an increase of 440 basis points[30] - Adjusted operating income increased significantly by 57.6% YoY to $147 million, with adjusted operating margin at 14.0%, up by 550 basis points[30] - Adjusted EPS saw substantial growth of 106.9% YoY, reaching $0.60[30] Segment Performance - Q1 2025 - Consumer Self-Care Americas (CSCA) net sales decreased by 3.6% YoY, while organic net sales also decreased by 3.6%[63] - Consumer Self-Care International (CSCI) net sales decreased by 3.4% YoY, but organic growth was positive at 4.5%[63] - CSCA adjusted operating income increased by 90.0% YoY to $100 million[66] - CSCI adjusted operating income increased slightly by 0.2% YoY to $86 million[66] Outlook and Strategy - The company is widening its 2025 reported net sales growth target to 0%-3% and organic net sales growth to 1.5%-4.5%[72] - The company reaffirms all other 2025 financial targets, including an adjusted gross margin of approximately 40%, an adjusted operating margin of approximately 15%, and adjusted diluted EPS between $2.90 and $3.10[72] - The company expects approximately 100% operating cash flow conversion and net leverage of approximately 3.5x adjusted EBITDA at the end of 2025[70] - The company anticipates a roughly 1% gross increase in global COGS in 2025 due to tariffs, with a full-year impact of approximately 5.5%[23]

Financial Performance - Net sales for Q1 2025 were $1.04 billion, a decline of 3.5% year-over-year, primarily due to a 2.0% impact from divested businesses and exited product lines, and a 1.2% impact from currency translation [3]. - Organic net sales decreased by 0.4%, with higher sales in the Nutrition, Upper Respiratory, and Healthy Lifestyle categories offset by lost distribution of lower margin products and lower sales in the Digestive Health category [3]. - Adjusted diluted EPS increased by 106.9% to $0.60, driven by a rise in adjusted operating income and lower interest expenses [21]. - Reported gross margin improved to 37.6%, an increase of 450 basis points compared to the prior year, while adjusted gross margin expanded to 41.0%, up 440 basis points [17]. - Adjusted operating income rose by 57.6% to $147 million, with an adjusted operating margin of 14.0%, an increase of 550 basis points year-over-year [7]. - Reported gross profit was $200 million, an increase of $47 million or 30.3%, while adjusted gross profit rose to $210 million, up 28.7% [26]. - Reported operating income increased to $64 million, a rise of 307.4% compared to the prior year, with adjusted operating income flat at $86 million [28][34]. - Adjusted operating margin expanded to 20.4%, a 70 basis points increase year-over-year, driven by operating leverage [35]. - Adjusted operating income for the three months ended March 29, 2025, was $146.6 million, or 14.0% of reported net sales, compared to $93.0 million, or 8.6%, for the same period in 2024 [63]. - The company reported a diluted earnings per share of $0.60 for the three months ended March 29, 2025, compared to $0.29 for the same period in 2024 [63]. Sales and Revenue Trends - The company widened its fiscal 2025 outlook for reported net sales growth to a range of 0% to 3% and organic net sales growth to 1.5% to 4.5% [4]. - The infant formula business recovery contributed to a 16% growth in the Nutrition category, with global brands delivering organic growth of 5.9% [6]. - Consumer Self-Care Americas segment net sales were $621 million, down 3.6% compared to the prior year, with reported operating income increasing by 307.4% to $64 million [23]. - CSCI net sales were $423 million, down 3.4%, as organic net sales growth of 4.5% was offset by divested businesses and unfavorable currency impacts [31]. - Net sales for the three months ended March 29, 2025, were $1,043.9 million, a decrease of 3.4% compared to $1,082.1 million for the same period in 2024 [57]. - Consumer Self-Care Americas (CSCA) net sales were $620.7 million for the three months ended March 29, 2025, down 3.6% from $644.1 million in the prior year [76]. - Consumer Self-Care International (CSCI) net sales decreased by 3.4% to $423.1 million for the three months ended March 29, 2025, compared to $437.9 million in the same period last year [76]. Cost Management and Operational Efficiency - 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 the program's inception [11]. - The company is proactively engaging in scenario planning to mitigate macroeconomic uncertainties, including tariffs impacting the cost of goods sold [6]. - Cash from operations was a loss of $(65) million, compared to a loss of $(1) million in the prior year, primarily due to inventory rebuilding and restructuring costs [37]. - The company estimates a gross increase to global cost of goods sold in 2025 of approximately $30 million to $40 million in Q4, and $145 million to $155 million for the full year [40]. - The company plans to continue focusing on operational improvements and cost management strategies to enhance profitability in future periods [53]. Inventory and Debt Management - Total debt on the balance sheet was $3.63 billion, with cash and cash equivalents at $410 million as of March 29, 2025 [38]. - Cash and cash equivalents decreased to $409.9 million from $558.8 million at the end of the previous quarter [60]. - Total assets increased to $9,759.8 million, up from $9,647.7 million at the end of 2024 [60]. - Long-term debt remained stable at $3,591.3 million, slightly up from $3,581.7 million [60]. - The company reported a decrease in inventories to $1,155.0 million from $1,081.8 million, indicating improved inventory management [60]. Segment Performance - Upper Respiratory product sales increased by 5.8% to $137.9 million, driven by higher incidence levels of cough and cold compared to the prior year [82]. - Nutrition segment sales rose by 15.6% to $104.8 million, primarily due to a 19% increase in infant formula sales [82]. - Women's Health segment sales decreased by 44.6% to $15 million, impacted by initial retailer stocking of a new product launched at the end of the prior year quarter [82]. - Skin Care net sales were $112 million, a decrease of 2.8%, with a 0.5% increase excluding currency impact [85]. - Upper Respiratory net sales increased to $74 million, up 6.4%, or 9.1% excluding currency impact, driven by higher seasonal sell-in activities [85]. - Healthy Lifestyle segment saw net sales of $67 million, an increase of 3.0%, or 7.5% excluding currency impact, despite lower consumption in weight loss [85]. - Pain & Sleep-Aids net sales reached $54 million, up 4.2%, or 5.1% excluding currency impact, primarily due to improved supply of Solpadeine [85]. - VMS net sales decreased to $38 million, down 15.5%, or 12.9% excluding currency impact, mainly due to deprioritization of the nutraceuticals portfolio [85]. Research and Development - R&D expenses for the three months ended March 29, 2025, were $26.7 million, or 2.6% of reported net sales, compared to $29.0 million, or 2.7%, for the same period in 2024 [69]. - R&D expenses for CSCA were $15.1 million, representing 2.4% of reported net sales for the three months ended March 29, 2025 [78].

Core Insights - The company advanced its 'Three-S' Plan to stabilize, streamline, and strengthen its operations, achieving strong first-quarter results driven by infant formula and OTC brands [1][4] - The fiscal year 2025 outlook for reported net sales growth has been widened to 0% to 3% from 1% to 3%, while reaffirming other financial targets including adjusted EPS [2][38] - The company is facing macroeconomic uncertainties, including tariffs, which are expected to impact costs, but it remains confident in its financial targets due to proactive measures [4][34] Financial Performance - First-quarter 2025 net sales were $1.04 billion, a decline of 3.5% year-over-year, primarily due to divested businesses and currency translation [8][11] - Adjusted diluted EPS increased by 106.9% to $0.60, driven by higher adjusted operating income and lower interest expenses [17][10] - Reported gross margin improved to 37.6%, up 450 basis points from the prior year, while adjusted gross margin expanded to 41.0% [14][10] Segment Performance - Consumer Self-Care Americas (CSCA) net sales decreased by 3.6% to $621 million, impacted by lost distribution of lower-margin products and lack of prior year benefits from new product launches [19][21] - Consumer Self-Care International (CSCI) net sales declined by 3.4% to $423 million, although organic net sales grew by 4.5% due to strong performance in specific categories [26][27] Strategic Initiatives - Project Energize aims to deliver annualized pre-tax savings of $140 million to $170 million by the end of 2026, with $40 million to $60 million expected to be reinvested [7][6] - The company has achieved gross annual savings of approximately $159 million since the program's inception, with restructuring charges of $111 million incurred [7][6] Cash Flow and Balance Sheet - First-quarter 2025 cash from operations was a loss of $65 million, primarily due to inventory rebuilding and restructuring costs [32] - As of March 29, 2025, cash and cash equivalents were $410 million, with total debt at $3.63 billion [33][50]

Core Viewpoint - Perrigo Company plc (PRGO) is expected to exceed earnings expectations in its first-quarter 2025 report, with a consensus estimate for sales at $1.08 billion and earnings at 53 cents per share [1]. Group 1: Upcoming Earnings Expectations - The earnings surprise history shows that Perrigo has beaten estimates in three of the last four quarters, with an average surprise of 7.78% [4]. - The Zacks Consensus Estimate for sales in the Consumer Self Care Americas (CSCA) segment is $657 million, while the model estimate is $638 million [2]. - For the Consumer Self Care International (CSCI) segment, the Zacks Consensus Estimate is $432 million, and the model estimate is $434 million [2]. Group 2: Macroeconomic Impact - An update on the expected impact of macroeconomic pressures is anticipated in the upcoming earnings report [3]. Group 3: Earnings Surprise Potential - Perrigo currently has an Earnings ESP of +2.37% and a Zacks Rank of 3, indicating a good chance of delivering an earnings beat [6][7]. - Other biotech stocks with favorable combinations for potential earnings beats include CytomX Therapeutics, argenx, and Novavax, each with varying Earnings ESPs and Zacks Ranks [8][9].

Group 1 - Mylan made a $29 billion unsolicited bid to acquire Perrigo in 2015, which was later increased to $34 billion [1] - Perrigo, under then-CEO Joseph Papa, rejected the bid, citing reasons for the rejection [1]