Perrigo(US:PRGO)2025-08-06 10:37Financial 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]