Perrigo(US:PRGO) Businesswire·2025-11-21 18:26Core Viewpoint - Perrigo Company plc is facing a class action lawsuit due to alleged securities fraud related to its infant formula business, which has experienced significant operational challenges and financial underperformance since its acquisition of Nestlé's Gateway infant formula plant [11]. Group 1: Acquisition and Financial Performance - In November 2022, Perrigo acquired Nestlé's Gateway infant formula plant and the rights to the Good Start brand for $170 million [3]. - The company reported fiscal year 2023 earnings on February 27, 2024, indicating a 50% decline in earnings per share compared to the previous year, attributed to remediation costs in the infant formula business [4]. - Following the earnings report, Perrigo's share price dropped by $4.87, or 15.14%, closing at $27.30 on February 27, 2024 [5]. Group 2: Ongoing Challenges and Market Reactions - On May 7, 2024, Perrigo reported a 34.5% decrease in net sales to $91 million for the first quarter, alongside a decline in gross margin [6]. - The share price fell by $3.28, or 9.8%, to close at $30.15 on May 7, 2024, following this announcement [7]. - On August 6, 2025, Perrigo disclosed that production issues led to scrapping approximately $11 million of inventory, resulting in a share price drop of $3.01, or 11.31%, to close at $23.61 [8]. Group 3: Strategic Review and Outlook Adjustments - On November 5, 2025, Perrigo announced a strategic review of its infant formula business and revised its fiscal year 2025 outlook, cutting net sales growth guidance to -2.5% to -3% from a previous expectation of 0% to 3% [9]. - The expected adjusted diluted earnings per share was also reduced to a range of $2.70 to $2.80, down from $2.90 to $3.10, indicating a significant cut in growth expectations [9]. - Following this news, Perrigo's stock price fell by $5.09, or 25.2%, closing at $15.10 per share on November 5, 2025 [10]. Group 4: Lawsuit Details - The class action lawsuit alleges that Perrigo made materially false and misleading statements regarding its business operations and failed to disclose significant issues within the acquired infant formula business [11]. - Specific allegations include underinvestment in maintenance and operational improvements, the need for substantial capital expenditures for remediation, and overstated financial results [11]. - Investors who purchased Perrigo securities during the class period are encouraged to participate in the lawsuit, with a deadline to file a lead plaintiff motion by January 16, 2026 [12].