Perrigo Reports Second Quarter 2024 Financial Results From Continuing Operations

Core Insights - The company reported a net sales decline of 10.7% year-over-year for Q2 2024, totaling $1.1 billion, primarily due to lower infant formula sales and reduced demand in seasonal categories [2][4][12] - Adjusted diluted earnings per share (EPS) for Q2 2024 was $0.53, down from $0.63 in the prior year, reflecting a decline attributed to prior year tax benefits and the impact of infant formula sales [2][3][4] - The company reaffirmed its fiscal 2024 adjusted diluted EPS outlook of $2.50 to $2.65, despite updating its organic net sales growth forecast to a decline of 3% to 1% [4][13] Financial Performance - Q2 2024 net sales were $1.1 billion, a decrease of $128 million or 10.7% compared to the prior year, with organic net sales down 9.1% [2][8] - Gross margin improved to 37.0%, a 120 basis points increase from the previous year, while adjusted gross margin expanded to 40.6%, up 190 basis points [2][8] - The company reported an operating loss of $27 million for Q2 2024, compared to an income of $57 million in the prior year, while adjusted operating income increased by 1.5% to $139 million [2][8] Segment Performance - Consumer Self-Care Americas (CSCA) net sales decreased by 15.5% to $634 million, primarily due to lower infant formula sales and reduced demand in seasonal categories [10][11] - Consumer Self-Care International (CSCI) reported a net sales decline of 2.5% to $431 million, with organic growth of 1.0% offset by product line exits and foreign currency impacts [11][12] - Adjusted operating income for CSCI increased by 29.5% to $91 million, driven by lower advertising investments and cost savings from Project Energize [11][12] Strategic Initiatives - The company is implementing Project Energize, a three-year program aimed at enhancing organizational agility and driving efficiency, expected to yield annualized pre-tax savings of $140 million to $170 million by 2026 [6][12] - The divestment of HRA Pharma Rare Diseases business was completed on July 10, 2024, generating upfront proceeds of $205 million [2][12] - The company is focusing on improving quality control and production capabilities, with expectations of a profit recovery in the second half of 2024 [5][12]