Core Insights - The company reported a net sales of $1.04 billion for Q3 2025, a decrease of 4.1% year-over-year, primarily due to organic net sales decline and the impact of divestitures and exited products [7][13][20] - Despite challenges in the marketplace, the company achieved year-to-date EPS growth and margin expansion, indicating resilience in its operations [1][9] - A strategic review of the infant formula business has been initiated, alongside ongoing reviews of the oral care business, while the sale of the dermacosmetics business is on track for Q1 2026 [1][9] Year-to-Date Performance - Year-to-date net sales reached $3.14 billion, down 2.8% year-over-year, with organic net sales declining by 1.7% [7][29] - Adjusted EPS for the year is projected to be between $2.70 and $2.80, reflecting a growth of 5% to 9% year-over-year [38] Segment Highlights Consumer Self-Care Americas (CSCA) - CSCA net sales were $646 million, down 3.8%, with organic net sales also declining by 3.1% [21][22] - The segment experienced growth in the U.S. OTC business, driven by share gains in five of seven categories, despite overall soft market consumption [22][23] Consumer Self-Care International (CSCI) - CSCI net sales decreased by 4.5% to $398 million, with organic net sales down 5.3% [27][29] - The decline was attributed to soft total OTC category consumption and challenges in specific product categories, despite some share gains in key brands [29][30] Financial Metrics - Reported operating income for Q3 was $73 million, compared to $80 million in the prior year, with adjusted operating income at $173 million, down 4.9% [7][18] - The company reported a diluted EPS of $0.09, an improvement from a loss of $(0.13) in the prior year [20][24] Strategic Initiatives - The company is implementing Project Energize, aimed at enhancing operational efficiency and is expected to yield annualized pre-tax savings of $140 million to $170 million by the end of 2026 [11] - The strategic reviews and divestitures are part of a broader effort to streamline operations and focus on core business areas [1][9]

Core Viewpoint - Perrigo Company plc is initiating a strategic review of its infant formula business to assess various alternatives and align with its 'Three-S' plan, focusing on disciplined capital allocation and improving returns [1][2][4] Business Overview - The infant formula business is projected to generate net sales of approximately $360 million in 2025, representing about 90% of Perrigo's global Nutrition category and less than 10% of the company's total annual net sales [3] - The operations have stabilized, producing quality assured formula, and Perrigo remains the only large-scale U.S. store brand and contract manufacturer with a significant near-term innovation pipeline [3] Strategic Intent - The review aims to accelerate cash flows and reassess a previously announced investment of $240 million in the infant formula business while optimizing portfolio impact [2] - The CEO emphasized the need for discipline in positioning the company's portfolio for sustainable growth and free cash flow generation, noting that the external environment has changed, affecting the strategic fit with consumer health OTC businesses [4]

Core Insights - Perrigo Company plc is scheduled to participate in one-on-one investor meetings at the Jefferies Miami Consumer Conference on November 18, 2025, with President and CEO Patrick Lockwood-Taylor and CFO Eduardo Bezerra attending [1] Company Overview - Perrigo is a leading pure-play consumer health company with over a century of experience in providing high-quality health and wellness solutions primarily in North America and Europe [2] - The company is a pioneer in the over-the-counter (OTC) self-care market, offering trusted self-care solutions that do not require a prescription, ensuring accessibility and choice for consumers [2] Business Model - Perrigo's unique business model leverages complementary businesses, where cash-generative store brand private label offerings fuel investments for leading brands such as Opill, Mederma, Compeed, EllaOne, and Jungle Formula [3]

Core Insights - Perrigo Company plc is identified as one of the 12 cheap healthcare stocks to buy now [1] - The company specializes in over-the-counter and self-care products, generic prescription pharmaceuticals, and active pharmaceutical ingredients, with a strong presence in private-label consumer health products [2] Strategic Developments - Perrigo is advancing its strategic plan to "Stabilize, Streamline, and Strengthen" by divesting non-core businesses, including the sale of its Dermacosmetics branded business to KKR-managed Kairos Bidco AB for up to €327 million, expected to close in Q1 2026 [3] - This divestiture reflects the company's focus on its core self-care and private-label consumer health offerings [3] Leadership and Investor Engagement - Insider purchases by executives, including EVP Charles Atkinson and Chief Scientific Officer Lennox Abigail, totaling $23,200, indicate management's confidence in the company's growth prospects [4] - Senior management, including President and CEO Patrick Lockwood-Taylor, participated in the Barclays Global Consumer Staples Conference, emphasizing ongoing investor engagement and transparency regarding strategic direction and product pipeline [5]

Business Model & Strategy - Perrigo 拥有独特、互补且可扩展的业务模式，通过品牌和商店品牌提供 250 多种分子和剂型组合[4] - Perrigo 正在实施“三S计划”以实现有吸引力的可持续股东总回报(TSR)，包括稳定、精简和加强三个阶段[10, 11] - Perrigo 独特地提供跨价值范围的产品[12] Financial Performance & Metrics - 2024 财年，Perrigo 的净销售额中，品牌产品约占 40%，商店品牌约占 60%[13] - Perrigo 预计调整后的每股收益(EPS)同比增长将达到两位数，市盈率(P/E)倍数将达到较高的个位数[27] - Perrigo 的目标是到 2027 财年，自由现金流(FCF)/销售额较 2024 年提高 40% 以上，净杠杆率低于 3 倍[11] Consumer Self-Care International (CSCI) Segment - 消费者自我保健国际部门(CSCI)预计将主要由品牌驱动增长[15] - 2024 财年，CSCI 的有机净销售额增长率为 2.9%，调整后的营业利润率为 21.0%[16] - Perrigo 在欧洲的咳嗽/感冒产品中排名第三[19] Market Trends & Opportunities - 美国非处方药(OTC)商店品牌的销量份额最近有所增长，截至 2025 年 4 月 20 日的 4 周内增长了 110 个基点，截至 2025 年 5 月 18 日的最新 4 周内增长了 50 个基点[23] - Perrigo 在美国商店品牌中占据领先地位，市场份额约为 50%，并且在美国拥有 62% 的家庭渗透率[13]

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]