Perrigo(PRGO)2022-08-09 16:12Financial Data and Key Metrics Changes - The company reported a consolidated GAAP loss from continuing operations of 0.48 per diluted share. Adjusted net income from continuing operations was 0.43, or 0.50 in the prior year quarter [28][29] - Net sales increased by 14.3%, with organic net sales growing by 17.2%, driven by strong consumer demand [30] - Gross profits grew by 8.7%, or 17% on a constant currency basis, despite inflationary pressures [30] Business Line Data and Key Metrics Changes - Consumer Self Care Americas (CSCA) net sales increased by 17%, driven by strong demand for cough and cold products and nutrition [32] - The Consumer Self Care International (CSCI) segment saw net sales increase by 25.8% on a constant currency basis, with organic net sales growing by 10.6% [33] - The women's health business grew by 77%, primarily due to the addition of HRA businesses and increased demand related to recent judicial decisions in the U.S. [14] Market Data and Key Metrics Changes - The upper respiratory revenues grew by 44% globally, attributed to a rebound in cough-cold sales compared to the previous year [13] - The nutrition business saw a 31% increase, primarily driven by infant formula demand due to a competitor's recall [14] - E-commerce sales grew more than 25% in the first half of the year, now accounting for over 12% of global sales [17] Company Strategy and Development Direction - The company is focused on optimizing and accelerating its self-care strategy, with plans to integrate the HRA portfolio and achieve related cost synergies [24] - A global supply chain initiative is underway, aiming for 300 million in net cost savings over five years [20][22] - The company is expanding its product categories to include women's health and skin care, with skin care now being the second largest global category [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges from inflation and labor shortages but expressed confidence in achieving gross margin recovery [19][43] - The company anticipates continued strong demand for its products, particularly in the context of the upcoming cough-cold season [48] - Management remains optimistic about the future, highlighting a strong pipeline of innovation and the successful execution of their self-care strategy [64] Other Important Information - The company closed on a 2.6 billion senior secured credit facility, locking in favorable rates [8] - The FDA approved the first-ever branded Rx to OTC switch for Nasonex, marking a significant regulatory achievement [18] - The company is committed to maintaining its dividend growth, with a strong track record of 18 consecutive years of increases [35] Q&A Session Summary Question: Update on trade inventory levels and growth outlook - Management confirmed that inventory levels are appropriate, with no significant influence on business going forward [39][40] Question: Comments on gross margin expectations - Management indicated that costs have continued to rise, but they remain on track to achieve their gross margin recovery goals [45] Question: Impact of recession on business - Management noted a more balanced portfolio now, with a shift towards store brands benefiting from potential downtrading during a recession [60] Question: Update on HRA deal accretion - Management confirmed that the 150 million operating profit impact from the HRA acquisition remains on track, though currency adjustments may affect it [62]