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]

Core Points - Perrigo Company plc plans to release its first quarter 2025 financial results on May 7, 2025, at 8:30 A.M. (EST) [1] - The earnings conference call will be accessible via webcast and phone, with a replay available from May 7 to May 14, 2025 [2] - Perrigo is a leading provider of Consumer Self-Care Products and OTC health solutions aimed at enhancing individual well-being [3]

Core Viewpoint - J.P. Morgan analysts indicate that Perrigo Company plc's first-quarter 2025 earnings will be significantly influenced by the potential impact of tariffs, which could affect near-term earnings [1][4]. Group 1: Earnings Forecast - Analysts project adjusted earnings of 55 cents per share and sales of $1.09 billion for Perrigo [1]. - The company is expected to face a low to mid-single-digit impact on global cost of goods sold (COGS) on an annualized basis due to tariffs [2]. Group 2: Business Impact - The oral care and infant formula segments are particularly affected, with sourcing from China and India [3]. - While the company aims to mitigate the impact through supply chain efficiencies and price increases, challenges remain in predicting short-term effects on earnings [3]. Group 3: Market Reaction - Perrigo's stock has declined by 4.70%, trading at $24.13 [4]. - The company has historically struggled to pass on price increases in a timely manner, making it difficult to absorb rising costs due to lower profit margins compared to peers [5].

Core Insights - Perrigo's international revenue performance is crucial for assessing its financial resilience and growth prospects [1][2] - The company's reliance on international markets influences its earnings durability and growth capabilities [2][9] Revenue Performance - Total revenue for the recent quarter was $1.14 billion, a decline of 1.6% year-over-year [4] - Revenue from "All other countries" was $27 million, representing 2.37% of total revenue, with a significant surprise decline of -33.11% compared to expectations of $40.37 million [5] - European revenue was $379.1 million, accounting for 33.30% of total revenue, which was a surprise decline of -9.54% from the consensus estimate of $419.08 million [6] Future Revenue Predictions - Analysts predict total revenue of $1.11 billion for the current fiscal quarter, indicating a 2.3% increase from the previous year [7] - Expected contributions from "All other countries" and Europe are projected to be 3.4% ($38.07 million) and 35.7% ($395.74 million) of total revenue, respectively [7] - For the full year, total annual revenue is expected to reach $4.42 billion, marking a 1.1% increase compared to last year [8] Market Observations - The intricacies of global interdependence and geopolitical factors are closely monitored by analysts, impacting earnings forecasts for companies with international operations [10] - The company's stock has increased by 16.7% over the past month, outperforming the S&P 500, which declined by 4.1% [13]

Group 1 - Perrigo Company is undergoing a transformation into a Consumer Self-Care Company, focusing on operational execution and leveraging unique assets [3] - The company has introduced a 3S plan: Stabilize, Streamline, and Strengthen, aimed at delivering value to shareholders [3] - The 2025 Investor Day presentation will include discussions on forward-looking statements and adjusted financial measures that are non-GAAP in nature [4][5]

Financial Performance - Net sales for the year ended December 31, 2024, were $4,373.4 million, a decrease of 6.0% compared to $4,655.6 million in 2023 [346]. - Gross profit for 2024 was $1,542.7 million, down from $1,680.4 million in 2023, reflecting a gross margin of approximately 35.3% [346]. - Operating income decreased to $112.9 million in 2024 from $151.9 million in 2023, indicating a decline of 25.7% [346]. - The company reported a net loss of $171.8 million for 2024, compared to a net loss of $12.7 million in 2023 [346]. - Basic earnings per share for continuing operations was $(1.17) in 2024, compared to $(0.03) in 2023 [346]. - Comprehensive loss for 2024 was $344.9 million, significantly down from a comprehensive income of $25.0 million in 2023 [351]. - Cash flows from operating activities for 2024 were $362.9 million, a decrease from $405.5 million in 2023 [354]. - The company reported a net cash increase from investing activities of $78.8 million in 2024, compared to a net cash decrease of $77.5 million in 2023 [354]. Assets and Liabilities - Total assets decreased to $9,647.7 million as of December 31, 2024, from $10,809.1 million in 2023, a decline of 10.7% [349]. - Total liabilities decreased to $5,328.3 million in 2024 from $6,041.2 million in 2023, a reduction of 11.8% [349]. - The company's cash, cash equivalents, and restricted cash decreased to $558.8 million in 2024 from $751.3 million in 2023 [349]. - Goodwill and indefinite-lived intangible assets decreased to $3,325.4 million in 2024 from $3,534.4 million in 2023 [349]. - Total inventories as of December 31, 2024, amounted to $1,081.8 million, a decrease from $1,140.9 million as of December 31, 2023 [441]. Impairments and Charges - The company incurred impairment charges of $88.9 million in 2024, compared to $90.0 million in 2023 [354]. - The company recorded a goodwill impairment of $22.1 million related to the Rare Diseases Business in 2024, following the announcement of its sale [452]. - The carrying value of the net assets held for sale of the Rare Diseases Business exceeded their fair value, leading to an impairment charge of $34.1 million, including a goodwill impairment of $22.1 million [421]. Foreign Exchange and Interest Rate Risks - The Company is exposed to foreign exchange risk, primarily from the movement of the U.S. dollar relative to the euro [307]. - The Company utilizes foreign exchange derivatives to mitigate fluctuations in exchange rates [311]. - A 1% increase in interest rates would result in approximately $2.3 million of additional annual interest expense in 2025 [312]. - The company utilizes various strategies to manage interest rate risk, including fixed-rate and variable-rate debt, as well as treasury-lock agreements and interest rate swaps [378]. - The notional amounts of foreign currency forward contracts totaled $502.5 million as of December 31, 2024, compared to $253.6 million as of December 31, 2023 [494]. Sales and Revenue Breakdown - Revenue from the U.S. market was $2,649.3 million, down from $2,916.8 million in 2023, representing a decline of 9.2% [413]. - Contract manufacturing revenue was $306.2 million for 2024, compared to $337.3 million in 2023, reflecting a decrease of 9.2% [417]. - The Upper Respiratory product category generated $500.3 million in sales for 2024, down from $561.4 million in 2023, a decline of 10.3% [415]. - The Nutrition product category saw a decline in sales to $449.5 million in 2024 from $563.2 million in 2023, a decrease of 20.2% [415]. - Total net sales in Europe for 2024 were $1,604.6 million, slightly down from $1,622.5 million in 2023, a decrease of 1.2% [413]. Acquisitions and Divestitures - The sale of the Rare Diseases Business to Esteve Healthcare S.L. was completed for a total consideration of $244.5 million, resulting in a pre-tax gain of $5.8 million [419][420]. - The acquisition of HRA Pharma was completed for approximately $1.9 billion, generating net sales of $193.6 million and a net operating loss of $59.4 million from April 29, 2022, to December 31, 2022 [427][428]. - The acquisition of Nestlé's Gateway Infant Formula Plant and GoodStart brand was completed for $110.0 million, generating net sales of $42.7 million and operating income of $11.5 million from November 1, 2022, to December 31, 2022 [430][431]. Legal and Regulatory Matters - Legal contingencies are recorded when a loss is considered probable and can be reasonably estimated, with reserves established for certain legal matters [395]. - The company retained certain pre-closing liabilities from the sale of the Rx business, subject to indemnity obligations from Altaris Capital Partners [438]. Cash Flow and Financing Activities - Issuances of long-term debt in 2024 totaled $1,091.2 million, a significant increase from $295.1 million in 2023 [354]. - Total borrowings outstanding as of December 31, 2024, amounted to $3,618.1 million, a decrease from $4,073.4 million in 2023 [500]. - The company recorded cash outflows of $45.8 million related to the settlement of cross-currency swaps as part of cash flows for investing activities for the year ended December 31, 2024 [479].

Core Insights - Perrigo Company plc (PRGO) reported adjusted earnings of 93 cents per share in Q4 2024, surpassing the Zacks Consensus Estimate of 92 cents, marking an 8% year-over-year increase due to improved margins and lower variable expenses [1] - Net sales for the quarter declined 1.6% year over year to $1.14 billion, falling short of the Zacks Consensus Estimate of $1.20 billion, primarily due to lost sales from exited businesses and product lines [1][2] - For the full year 2024, Perrigo's revenues totaled $4.37 billion, a decrease of 6.1% year over year, with adjusted earnings of $2.57 per share, down 0.4% from the previous year [7] Sales Performance - In the Consumer Self Care Americas (CSCA) segment, net sales were flat year over year at $744 million, with growth in Nutrition, Skin Care, and Women's Health categories offset by declines in Pain & Sleep Aids, Upper Respiratory, and Digestive Health categories [5] - The Consumer Self Care International (CSCI) segment reported net sales of $394 million, down 4.5% year over year due to product line exits and unfavorable currency movements, although organic sales increased by 1.8% [6] Future Outlook - Perrigo is set to host a virtual Investor Day to present its strategic plan for 2025-2027 and provide financial guidance for the full year 2025 [8]

Core Viewpoint - Perrigo Company plc is focused on consumerizing, simplifying, and scaling its global self-care platform, aiming for stable and reliable performance [1] Group 1: Business Strategy - The company has a unique complementary business model where store brands and infant formula generate cash for investments in higher margin, higher growth brands [2] - The strategy is anchored in a 'Three-S' plan: 'Stabilizing' Consumer Self-Care Americas, 'Streamlining' the global portfolio, and 'Strengthening' key 'High-Grow' brands [3] - Management emphasizes the importance of consumer-led innovation and a robust global supply chain to serve a wide consumer base [2] Group 2: Financial Targets - For fiscal year 2025, the company targets all-in net sales growth of 1% to 3%, organic net sales growth of 2.5% to 4.5%, and an adjusted gross margin of approximately 40% [7] - The adjusted diluted earnings per share (EPS) is projected to be in the range of $2.90 to $3.10, reflecting a growth of 13% to 21% [7] - Long-term targets include organic net sales CAGR of 2.5% to 4.5% and adjusted gross margin expansion of 200 to 400 basis points by 2027 [7] Group 3: Leadership Insights - President and CEO Patrick Lockwood-Taylor expressed optimism about the company's future opportunities and the strategic path forward [4] - The management team has faced challenges over the past 21 months and has effectively pivoted to stabilize and strengthen the business [4] - The company anticipates significant earnings growth and cash flow, alongside a growing dividend, which could lead to notable total shareholder returns [4]