Perrigo Company plc
Perrigo Company plc
11/05/2025 | Press release | Distributed by Public on 11/05/2025 14:21
Quarterly Report for Quarter Ending September 27, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis ("MD&A") is intended to provide readers with an understanding of our financial condition, results of operations, and cash flows by focusing on changes in certain key measures from year to year. This MD&A is provided as a supplement to, and should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes found in Item 1included in this Form 10-Q, and our Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). These historical financial statements may not be indicative of our future performance. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks referred to under "Risk Factors" in Item 1A of our 2024 Form 10-K and Part II. Item 1Aof this Form 10-Q.
Perrigo Company plc was incorporated under the laws of Ireland on June 28, 2013 and became the successor registrant of Perrigo Company, a Michigan corporation, on December 18, 2013 in connection with the acquisition of Elan Corporation, plc ("Elan"). Unless the context requires otherwise, the terms "Perrigo," the "Company," "we," "our," "us," and similar pronouns used herein refer to Perrigo Company plc, its subsidiaries, and all predecessors of Perrigo Company plc and its subsidiaries.
EXECUTIVE OVERVIEW
Perrigo is a leading pure-play self-care company with more than a century of providing high-quality health and wellness solutions to meet the evolving needs of consumers. As one of the originators of the over-the-counter ("OTC") self-care market, Perrigo is led by its vision "To Provide The Best Self-Care For Everyone"and its purpose to "Make Lives Better Through Trusted Health and Wellness Solutions, Accessible To All".
Perrigo works to fulfill its vision and purpose as a top-tier consumer self-care company with a focused portfolio based on consumer-led innovation, which meets societal needs for:
•Access: Perrigo's self-care products and solutions enhance the daily lives of millions of families, empowering them to take control of their health and wellness.
•Value: Perrigo delivers value by helping consumers proactively manage their well-being through affordable and effective self-care solutions.
•Reliability: Perrigo ensures the safety and effectiveness of its self-care solutions, best serving its consumers.
Perrigo provides access to trusted self-care solutions that can be used without the need to visit a health practitioner for a prescription. Guided by our vision and purpose, our strategic goal is to create sustainable and value accretive growth by 1) delivering consumer preferred brands and innovation, 2) driving category growth with our customers, 3) powering our business with our world-class, quality assured supply chain, including a focus on sustainability with meaningful goals to reduce greenhouse gas emissions, water, and waste, in addition to increasing the recyclability of our packaging, and 4) evolving our global organization to one cohesive operating model. Our unique competency is to deliver health and wellness solutions across multiple price and value tiers that improve access and choice for consumers.
Perrigo's broad offerings are well diversified across several major product categories as well as across geographies, primarily in North America and Europe with no one product representing more than 5% of total revenue. In North America, Perrigo is the leading store brand private label provider of self-care products in many categories, including upper respiratory, nutrition and women's health, along with brands including Opill®and Mederma®. In Europe, our portfolio consists primarily of brands, including Compeed®, ellaOne®,Solpadeine®, Jungle Formula®, and ACO®.
Two key initiatives are fundamental to advancing our self-care strategy - our Supply Chain Reinvention Program, a global supply chain efficiency program, and Project Energize, a global investment and efficiency program. In addition, we continue to invest in other initiatives, including innovation, information systems and tools, and our people to drive consistent and sustainable results.
Perrigo's unique complementary businesses enable each individually to play a specific reinforcing role, where 1) store brands and infant formula generate cash for investments into the Company's key higher margin, higher growth or 'High-Grow'brands, 2) branding and innovation capabilities deliver brand and store brand demand generation designed to lead to stronger customer partnerships, 3) consumer-led innovation is scaled across brands, store
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Executive Overview
brands and geographies, and 4) the Company leverages its global supply chain scale and reach with 100-plus molecules, at 100% consumer price point coverage, to serve the most consumers.
The Company's plan to drive cash flow and total shareholder return is anchored behind its 'Three-S' plan - 'Stabilizing' Consumer Self-Care Americas store brand and infant formula businesses; 'Streamlining' the global portfolio, enterprise operating model and Consumer Self-Care International business; and 'Strengthening' what is working by prioritizing and increasing investments behind key 'High-Grow' brands.
Our fiscal year begins on January 1 and ends on December 31. We end our quarterly accounting periods on the Saturday closest to the end of the calendar quarter, with the fourth quarter ending on December 31 of each year.
Our Segments
Our reporting and operating segments reflect the way our chief operating decision maker, who is our Chief Executive Officer ("CEO"), makes operating decisions, allocates resources and manages the growth and profitability of the Company. Our reporting and operating segments are:
•Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business in the U.S. and Canada.
•Consumer Self-Care International ("CSCI") comprises our consumer self-care business outside of the U.S. and Canada, primarily in Europe and Australia.
We previously had an Rx segment comprised of our generic prescription pharmaceuticals business in the U.S. and other pharmaceuticals and diagnostic businesses in Israel, which have been divested. The Rx segment was reported as Discontinued Operations in 2021, and is presented as such for all periods in this report. See Item 1. Note 5for more information.
Recent Developments
•On July 13, 2025, the Company entered into a Master Sale and Purchase Agreement with Kairos Bidco AB ("Kairos"), an investment vehicle managed by an affiliate of KKR & Co., Inc. ("KKR"), pursuant to which, and subject to the terms and conditions set forth therein, the Company agreed to sell and Kairos agreed to acquire (1) all of the shares in ACO®Hud Nordic AB, a Swedish private corporation (aktiebolag) (the "Target") and (2) various assets relating to the manufacture, packaging, sale and distribution of certain cosmetic products, medicinal products and medical devices related to the Company's Dermacosmetics branded business in Northern Europe, the Netherlands and Poland (together with the Target, the "Dermacosmetics Business"). Following the closing of KKR's acquisition of Karo Healthcare AB on August 27, 2025, Kairos has transferred the binding agreement to acquire the Dermacosmetics Business to Karo Healthcare AB. See Item1. Note 4for more information.
•On November 5, 2025, we announced a strategic review of our infant formula business. The review will assess a full range of alternatives. Refer to the Nutrition Network Optimization; Strategic Reviewsection below for additional details. In addition, as previously disclosed, our strategic review of our Oral Care business is continuing as we assess a full range of alternatives for that business.
Restructuring
Supply Chain Reinvention Program
In 2022, we initiated a Supply Chain Reinvention Program to reduce structural costs, improve profitability and our service levels to our retail partners, and strengthen our resiliency by streamlining and simplifying our global supply chain. Through this initiative, we are reducing portfolio complexity, investing in advanced planning capabilities, diversifying sourcing, and optimizing our manufacturing assets and distribution models. We estimate a total annual run-rate potential savings opportunity by the end of fiscal year 2028 of between $200 million to $300 million (excluding related depreciation expense on capital investments). To obtain these potential benefits, we anticipate incurring costs between $300 million to $350 million by the end of fiscal year 2028 to complete the program implementation, with the substantial portion of the costs incurred by the end of 2025, including capital investments, restructuring expenses and implementation costs. A significant portion of the annual run-rate potential savings of the Program, between $150 million to $200 million (not including related depreciation expense on capital investments), are anticipated by the end of fiscal year 2025. Refer to Item 1. Note 14for further details on restructuring charges.
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Executive Overview
Project Energize
Perrigo has successfully transformed into a pure-play consumer self-care company and is now embarking on the next stage of its self-care journey - evolving to One Perrigo. This evolution will create sustainable, value accretive growth through a business model that better positions the Company to win in self-care.
As part of the Company's sustainable, value accretive growth strategy, the Company launched Project Energize - a global investment and efficiency program to drive the next evolution of capabilities and organizational agility. This three-year program is expected to produce significant benefits in the Company's long-term business performance by enabling our One Perrigo growth strategy, increasing organizational agility and mitigating impacts from stabilizing and strengthening the infant formula business.
Project Energize was initiated in the first quarter of 2024, subject to local law and consultation requirements, and is expected to deliver annualized pre-tax savings in the range of $140 million to $170 million by the end of 2026. The Company expects an annual reinvestment of approximately $40 million to $60 million of these savings to drive its business model. Restructuring and related charges associated with these actions are estimated to be in the range of $140 million to $160 million, including $20 million to $40 million in investments to enhance capabilities, and are expected to be substantially incurred by the end of 2026. Restructuring activities as part of Project Energize are expected to result in the net reduction of approximately 6% of total Perrigo roles. Refer to Item 1. Note 15for further details on restructuring charges.
Nutrition Network Optimization; Strategic Review
In 2025, Perrigo initiated the Nutrition Network Optimization project to optimize our infant formula manufacturing footprint, upgrade packaging capabilities, harmonize quality processes, and enhance our research and development capabilities. On November 5, 2025, we announced a strategic review of our infant formula business.
The review will assess a full range of alternatives and is aligned with Perrigo's 'Three-S' (Stabilize, Streamline, Strengthen) plan and reflects our commitment to disciplined capital allocation and supporting improved return on invested capital and total shareholder return. It will focus on a combination of accelerating cash flows and reassessing the previously announced investment in this business of $240 million, while optimizing portfolio impact and management focus.
For further details on our restructuring charges related to the strategic review, refer to Item 1. Note 15.
Market Factors and Trends
Macroeconomic Uncertainty
Current macroeconomic conditions remain dynamic, including impacts from inflation and interest rates, volatile changes in foreign currency exchange rates, tariffs, political unrest and uncertainty and legislative and regulatory changes. Any causes of market size contraction could reduce our sales or erode our operating margin and consequently reduce our net earnings and cash flows. As a result of these dynamic conditions and uncertainties, we have modified, and may further modify, our operations and strategic initiatives, including by adjusting our investment priorities, reallocating resources, or delaying specific initiatives, such as deferring capital expenditures on the Nutrition Network Optimization project and seeking further working capital improvements.
Current uncertainties arising from increased tariffs on imported products could have an adverse effect on our Company. In 2025, the U.S. government announced new or additional tariffs on products imported from many countries and individualized "reciprocal" tariffs on countries with which the U.S. has the largest trade deficits. While some tariffs have become effective, others have been temporarily suspended or permanently repealed and the U.S. government has announced trade agreements with various governments and additional tariffs on other products. As a result, there continues to be significant volatility and uncertainty regarding the scope, timing, implementation and effective rates of tariffs.
Based on current assessments, excluding any potential impact from pharmaceutical tariffs that may cover ingredients used in the manufacturing of OTC products and recently announced potential changes to tariffs on items sourced from China, we estimate a gross increase to global cost of goods sold in 2025 beginning in the fourth quarter of approximately $10 million to $20 million, and approximately $40 million to $50 million, on a full-year basis,
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Executive Overview
updated from the previously estimated range of $50 million to $60 million. We seek to mitigate these impacts through a combination of strategic pricing actions, insourcing to our U.S.-based manufacturing facilities and other supply chain actions.
In addition, our interest expense can be impacted by the overall global economic and interest rate environment. We manage interest rate risk through our capital structure and the use of interest rate swaps to fix the interest rate on greater than 90% of our outstanding debt.
Inflationary Costs and Supply Chain
Supply chain disruptions continue in specific categories such as agricultural commodities due to climate impacts, and supply chain shortages continue due to the Middle East Conflict. Inflationary pressures are still a factor on cost in major economies globally across food, energy and labor. While global inflation is expected to fall, U.S. inflation is now predicted to stay above previous predictions. We previously experienced employment vacancies and attrition in the labor market which negatively impacted productivity and drove the need for wage rate increases and other retention benefits. We implemented a series of actions to substantially mitigate these and other inflationary cost pressures, such as strategic pricing and our Supply Chain Reinvention Program. Benefits from our actions have substantially offset the impacts of inflation to date. However, future supply chain disruptions and inflationary pressures from the continuation of the conflicts between Russia and Ukraine, any escalating conflicts in the Middle East, persistent geopolitical tensions and the impact of tariff and trade policy are uncertain.
Infant Formula
As part of its efforts to prevent supply interruptions and risk of Cronobacterspp. illnesses associated with powdered infant formula, in March 2023, the Federal Drug Administration ("FDA") released an "Immediate National Strategy to Increase the Resiliency of the U.S. Infant Formula Market" and issued a letter to the powdered infant formula industry to share information to assist the industry in improving the microbiologic safety of powdered infant formula. In response to those changes, we made considerable investments in all our infant formula manufacturing sites, including enhanced cleaning and sanitation protocols, enhancements to our environmental monitoring programs, enhanced quality oversight and increased the number of quality and operations personnel. These changes have resulted in higher costs and lower manufacturing output and production yields across our infant formula network.
As previously disclosed, we received a warning letter from the FDA on August 30, 2023 relating to the Perrigo Wisconsin infant formula facility, which was acquired in November 2022. While we worked to resolve the issues raised in the August 30 letter, on November 29, 2023, we received notice from the FDA of additional inspection observations relating to Perrigo Wisconsin. Consistent with our commitment to quality, we temporarily paused all production at that facility and conducted an extended site-wide assessment and cleaning.
We also bolstered our internal resources and brought in additional outside expertise to help revise, enhance and strengthen comprehensive standards and processes across our infant formula network, including in some instances, pausing production for comprehensive cleaning and infrastructure improvements. All planned large-scale manufacturing plant resets have been completed, we have implemented quality enhancements, including further protocol, process and procedural improvements at the site level, and all sites are producing reliable, quality-assured product.
In October and November 2024, the FDA conducted its first inspection of the Perrigo Wisconsin infant formula facility since the November 2023 inspection. Following this 2024 inspection, the FDA did not issue written observations via Form FDA 483.
We had incurred certain extraordinary non-recurring costs associated with the remediation and enhancement actions described above and the evolving U.S. infant formula regulatory landscape, including consulting and legal fees relating to our responses to the FDA and the development and institution of new protocols across our infant formula manufacturing sites, as well as other costs relating to the extended cleaning and sanitization and the pausing and restarting of production. Cash costs to achieve this remediation plan are approximately $22.6 million with approximately 95% of such costs incurred during the year ended December 31, 2024.
We have been focusing on rebuilding market share, while managing the additional cost and production processes. Although we have gained market share in non-WIC infant formula powder, heightened competition from existing and new entrants, particularly as a result of continued regulatory forbearance allowing imported infant formulas has led to increased supply of infant formula in the United States, and the previously disclosed lost distribution of the Good
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Executive Overview
Start®brand have hindered our efforts to recover our previous market share. On November 5, 2025, we announced a strategic review of our infant formula business focused on a combination of accelerating cash flows and reassessing the previously announced investment in this business, while optimizing portfolio impact and management focus. See Nutrition Network Optimization; Strategic Reviewabove.
War in Ukraine
The invasion of Ukraine by Russia and resulting economic and political sanctions imposed by the United States, United Kingdom, European Union, and other countries on Russia, Belarus, and occupied regions in Ukraine have negatively impacted our results from operations in the region. Future impacts are difficult to predict due to the high level of uncertainty related to the war's duration, evolution and resolution. If the conflict spreads or materially escalates, or economic conditions deteriorate, the impact on our business and results of operations could be material.
Middle East Conflicts
We continue to closely monitor the ongoing conflict and the social, political and economic environment in Israel and in the surrounding region to evaluate the impacts on our operations and supply chain. Israel is a global technology research and development center that plays a critical role in the global Active Pharmaceutical Ingredients ("API") market, as a number of our key suppliers are located within Israel. The Company sources some raw materials and finished goods from suppliers in Israel for certain self-care products, including omeprazole. To date, Perrigo has confirmed that our suppliers in the region have active operations and continue to manufacture materials for us, and we have not received any reports of restrictions on imports or exports in Israel. However, there is potential for some disruption as it relates to in-country logistics, including freight. As a precaution, Perrigo has engaged alternate suppliers to help minimize a potential supply disruption. If the conflict spreads or materially escalates, or if the conflict leads to further volatility and uncertainty in financial markets or economic conditions, the impact on our business and results of operations could be material. For example, an escalation in military activity in the Red Sea region has the potential to disrupt supply chains and lead to further inflationary pressures which we are also continuing to monitor.
Foreign Exchange
We have both translation and transaction exposure to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to 1) the impact from input costs that are denominated in a currency other than the local reporting currency and 2) the revaluation of transaction-related working capital balances denominated in currencies other than the functional currency. Significant exchange rate fluctuations, especially in the Euro or the British Pound Sterling, have had, and could continue to have, a significant impact on our net sales, net earnings and cash flows.
For additional information, refer to Item 1A - Risk Factors.
RESULTS OF OPERATIONS
Currency Translation
Any currency translation effects described below represent estimates of the net differences between translation of foreign currency transactions into U.S. dollars for the three and nine months ended September 27, 2025 at the average exchange rates for the reporting period and average exchange rates for the three and nine months ended September 28, 2024.
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Consolidated
CONSOLIDATED FINANCIAL RESULTS
Three Month Comparison
| Three Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 1,043.3 | $ | 1,087.5 | |||||||
| Gross profit | $ | 377.1 | $ | 404.4 | |||||||
| Gross profit % | 36.1 | % | 37.2 | % | |||||||
|
Operating income
|
$ | 72.6 | $ | 80.4 | |||||||
|
Operating income %
|
7.0 | % | 7.4 | % | |||||||
Net sales decreased $44.2 million, or 4.1%, due primarily to:
•$47.1 million decrease, or 4.4%, due primarily to lower net sales in the Nutritioncategory of $27.3 million driven by a strong product pipeline refill to contract manufacturing customers and consumer pantry loading ahead of a port strike threat in the prior year quarter and lost distribution of the Good Start®brand, and unfavorable impacts across our global OTC businesses due to soft category consumption. These were partially offset by higher net sales in the Skin Care category of $5.7 million driven by new distribution and increased consumption in the Minoxidilstore brand franchise, along with higher net sales of Mederma®;
•$14.7 million decrease due to the prior year divestitures of the Orion Laboratories Hospital & Specialty Business (the "Hospital & Specialty Business") and the HRA Pharma Rare Diseases Business (the "Rare Diseases Business") and the sale of branded products within our CSCI segment; partially offset by
•$17.6 million increase from favorable foreign currency translation.
Operating income decreased $7.8 million, or 9.7%, due primarily to:
•$27.3 million decrease in gross profit driven by lower net sales volumes flow through primarily in CSCI and the Nutrition category, and divested businesses and exited product lines of $7.4 million, partially offset by favorable foreign currency translation of $9.3 million and new products. Gross profit as a percentage of net sales decreased 110 basis points compared to the prior year due primarily to the same factors that drove gross profit, partially offset by Supply Chain Reinvention savings.
•$19.5 million decrease in operating expenses driven by decreased administrative costs of $22.7 million due primarily to lower variable employee expenses, and the absence of prior year impairment charges of $16.2 million recognized as part of the assets held for sale of the Hospital & Specialty Business, partially offset by the absence of the prior year gain on sale of branded products of $26.0 million.
Nine Month Comparison
| Nine Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 3,143.5 | $ | 3,235.1 | |||||||
| Gross profit | $ | 1,132.3 | $ | 1,156.8 | |||||||
| Gross profit % | 36.0 | % | 35.8 | % | |||||||
|
Operating income (loss)
|
$ | 164.9 | $ | (1.3) | |||||||
|
Operating income (loss) %
|
5.2 | % | - | % | |||||||
Net sales decreased $91.6 million, or 2.8%, due primarily to:
•$62.3 million decrease due to the prior year divestitures of the Rare Diseases Business and the Hospital & Specialty Business and the sale of branded products within our CSCI segment;
•$52.4 million decrease, or 1.7%, due primarily to lower net sales in the Digestive Health category of $39.9 million and Oral Carecategory of $24.6 million driven by soft OTC category consumption, as well as a prior year benefit in theWomen's Healthcategory of $15.0 million from initial retailer stocking of Opill®which launched at the end of the first quarter in the prior year, partially offset by higher net sales in theUpper Respiratorycategory of $21.6 million. These were partially offset by
•$23.1 million increase from favorable foreign currency translation.
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Consolidated
Operating income increased $166.2 million, due primarily to:
•$24.5 million decrease in gross profit driven by lower net sales volumes flow through primarily in U.S. OTC, the impact of divested businesses and exited products of $39.5 million, and lower manufacturing efficiencies, partially offset by the infant formula business recovery, Supply Chain Reinvention benefits, Project Energize savings, favorable currency translation of $14.0 million and new products. Gross profit as a percentage of net sales increased 20 basis points compared to the prior year due to the same factors that impacted gross profit; and
•$190.7 million decrease in operating expense driven by lower selling and administrative costs of $73.8 million due primarily to benefits from Project Energize and lower variable employee expenses, the absence of prior year impairment charges of $50.3 million recognized as part of the assets held for sale of the Hospital & Specialty Business and the Rare Diseases Business, decreased restructuring costs of $39.2 million driven by Project Energize and a decrease in Other operating (income) expense, net due to lower litigation expenses partially offset by the absence of the prior year gain on sale of branded products of $26.0 million.
CONSUMER SELF-CARE AMERICAS FINANCIAL RESULTS
Three Month Comparison
| Three Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 645.6 | $ | 671.3 | |||||||
| Gross profit | $ | 205.6 | $ | 219.4 | |||||||
| Gross profit % | 31.8 | % | 32.7 | % | |||||||
| Operating income | $ | 94.7 | $ | 102.2 | |||||||
| Operating income % | 14.7 | % | 15.2 | % | |||||||
Net sales decreased $25.7 million, or 3.8%, due primarily to:
•$25.6 million decrease, or 3.8%, due primarily to lower net sales in the Nutrition category of $27.3 million, driven by a strong product pipeline refill to contract manufacturing customers and consumer pantry loading ahead of a port strike threat in the prior year quarter and lost distribution of the Good Start®brand, and unfavorable impacts across multiple U.S. OTC businesses due to soft category consumption. These were partially offset by higher net sales in the Upper Respiratorycategory of $8.3 million, due primarily to new distribution and store brand share gains amid lower consumption, as well as higher net sales in theSkin Carecategory of $6.9 million due primarily to higher consumption within the Minoxidilfranchise and new distribution in addition to higher net sales of Mederma®.
CSCA net sales by product category were as follows:
| Sales | Three Months Ended | ||||||||||||||||||||||
|
(in millions, except percentages)
|
September 27, 2025 | September 28, 2024 | $ Change | % Change | |||||||||||||||||||
| Upper Respiratory | $ | 129.2 | $ | 120.9 | $ | 8.3 | 6.8 | % | |||||||||||||||
| Digestive Health | 105.5 | 113.5 | (8.0) | (7.0) | % | ||||||||||||||||||
| Nutrition | 99.8 | 127.1 | (27.3) | (21.5) | % | ||||||||||||||||||
| Pain and Sleep-Aids | 88.6 | 87.7 | 0.9 | 1.0 | % | ||||||||||||||||||
| Healthy Lifestyle | 77.5 | 80.9 | (3.5) | (4.3) | % | ||||||||||||||||||
| Oral Care | 62.8 | 66.9 | (4.2) | (6.2) | % | ||||||||||||||||||
| Skin Care | 58.9 | 51.9 | 6.9 | 13.3 | % | ||||||||||||||||||
| Women's Health | 19.0 | 18.0 | 1.0 | 5.6 | % | ||||||||||||||||||
| Vitamins, Minerals, and Supplements ("VMS") | 2.1 | 3.5 | (1.4) | (39.2) | % | ||||||||||||||||||
| Other CSCA | 2.2 | 0.7 | 1.7 | 214.3 | % | ||||||||||||||||||
| Total CSCA | $ | 645.6 | $ | 671.3 | $ | (25.7) | (3.8) | % | |||||||||||||||
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CSCA
Sales in each category were driven primarily by:
•Upper Respiratory:Net sales of $129.2 million increased 6.8% due primarily to new distribution and store brand share gains amid lower consumption, leading to higher net sales of both cough and cold and allergy products, including store brand Fluticasone.
•Digestive Health:Net sales of $105.5 million decreased 7.0% due primarily to new lower shelf pricing at a specific retailer and lower consumption of proton pump inhibitors, partially offset by Perrigo store brand share gains. These dynamics more than offset higher net sales and market share gains of Polyethylene Glycol 3350.
•Nutrition:Net sales of $99.8 million decreased 21.5% due primarily to a strong prior-year quarter from refilling contract customer inventories, consumer pantry loading ahead of a port strike threat and previously disclosed lost distribution of the Good Start®brand, partially offset by growth in store brand infant formula consumption along with the reintroduction of SKU assortments.
•Pain and Sleep-aids: Net sales of $88.6 million increased 1.0% due primarily to new distribution which more than offset soft category consumption.
•Healthy Lifestyle: Net sales of $77.5 million decreased 4.3% due primarily to lower category consumption and timing of shipments of smoking cessation products, partially offset by new distribution and market share gains.
•Oral Care: Net sales of $62.8 million decreased 6.2% due primarily to lost distribution of lower margin products and the absence of Plackers®dental flossers promotions compared to the prior year.
•Skin Care: Net sales of $58.9 million increased 13.3% due primarily to higher consumption within the Minoxidilfranchise and new distribution, in addition to higher net sales of Mederma®.
•Women's Health: Net sales of $19.0 million increased 5.6% due primarily to higher net sales of Opill®.
•VMS and Other: Net sales of $4.3 million increased 2.4% due primarily to volume decline in the VMS category.
Operating income decreased $7.5 million, or 7.3%, due primarily to:
•$13.8 million decrease in gross profit due primarily to lower net sales volumes flow through driven by the Nutrition category, partially offset by favorable impacts from lower materials inflation and benefits from Supply Chain Reinvention. Gross profit as a percentage of net sales decreased 90 basis points compared to the prior year due primarily to the same factors that drove gross profit, in addition to less favorable store brand product mix compared to the prior year quarter.
•$6.3 million decrease in operating expenses driven by reduced administrative costs of $6.6 million due primarily to lower variable employee expenses, partially offset by higher restructuring costs associated with Project Energize and Nutrition Network Optimization.
Nine Month Comparison
| Nine Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 1,888.3 | $ | 1,949.5 | |||||||
| Gross profit | $ | 568.4 | $ | 562.6 | |||||||
| Gross profit % | 30.1 | % | 28.9 | % | |||||||
|
Operating income
|
$ | 203.7 | $ | 187.1 | |||||||
| Operating income % | 10.8 | % | 9.6 | % | |||||||
Net sales decreased $61.2 million, or 3.1%, due primarily to:
•$60.6 million decrease, or 3.1%, due primarily to unfavorable impacts across multiple U.S. OTC businesses due to soft category consumption and a prior year benefit in the Women's Healthcategory of $15.0 million from initial retailer stocking of Opill®which launched at the end of the first quarter in the prior year. These were partially offset by higher net sales in the Upper Respiratorycategory of $20.3 million due primarily to higher first quarter incidence levels of cough cold compared to the prior year, new business wins and store brand share gains amid lower consumption.
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CSCA
CSCA net sales by product category were as follows:
| Sales | Nine Months Ended | ||||||||||||||||||||||
|
(in millions, except percentages)
|
September 27, 2025 | September 28, 2024 | $ Change | % Change | |||||||||||||||||||
| Upper Respiratory | $ | 390.4 | $ | 370.0 | $ | 20.3 | 5.5 | % | |||||||||||||||
| Digestive Health | 318.3 | 361.7 | (43.4) | (12.0) | % | ||||||||||||||||||
| Nutrition | 300.1 | 303.8 | (3.7) | (1.2) | % | ||||||||||||||||||
| Pain and Sleep-Aids | 245.4 | 251.9 | (6.5) | (2.6) | % | ||||||||||||||||||
| Healthy Lifestyle | 221.5 | 221.3 | 0.2 | 0.1 | % | ||||||||||||||||||
| Oral Care | 184.8 | 204.8 | (20.2) | (9.8) | % | ||||||||||||||||||
| Skin Care | 165.2 | 158.6 | 6.6 | 4.2 | % | ||||||||||||||||||
| Women's Health | 52.7 | 62.0 | (9.2) | (14.9) | % | ||||||||||||||||||
| VMS | 5.9 | 13.0 | (7.1) | (54.7) | % | ||||||||||||||||||
| Other CSCA | 4.0 | 2.4 | 1.8 | 66.7 | % | ||||||||||||||||||
| Total CSCA | $ | 1,888.3 | $ | 1,949.5 | $ | (61.2) | (3.1)% | ||||||||||||||||
Sales drivers in each category are provided below:
•Upper Respiratory:Net sales of $390.4 million increased 5.5% due primarily to higher first quarter incidence levels of cough cold compared to the prior year, new business wins and store brand share gains amid lower consumption, leading to higher net sales of both cough and cold and allergy products, including store brand Fluticasone andFexofenadine. This growth was partially offset by previously disclosed net lost distribution of lower margin products;
•Digestive Health:Net sales of $318.3 million decreased 12.0% due primarily to first half net lost distribution of lower margin products in U.S. Store Brand and lower consumption and customer mix of proton pump inhibitors, including Omeprazole, Esomeprazole andLansoprazole, despite Perrigo store brand share gains. These impacts more than offset higher net sales of Polyethylene Glycol, where Perrigo also gained store brand market share;
•Nutrition:Net sales of $300.1 million decreased 1.2% due primarily to previously disclosed lost distribution of the Good Start®infant formula brand and a strong prior-year quarter from refilling contract customer inventories and consumer pantry loading ahead of a port strike threat, partially offset by growth in store brand infant formula consumption;
•Pain and Sleep-aids: Net sales of $245.4 million decreased 2.6% due primarily to first half net lost distribution of lower margin products and lower category consumption of children's analgesics medicines and lower dollar share compared to prior year, partially offset by new business awards;
•Healthy Lifestyle: Net sales of $221.5 million increased 0.1% due primarily to new distribution and stronger base velocities, leading to market share gains in nicotine gums and lozenges, partially offset by lower category consumption;
•Oral Care:Net sales of $184.8 million decreased 9.8% due primarily to net lost distribution of lower margin products at specific retail customers and lower net sales of Plackers® dental flossers;
•Skin Care:Net sales of $165.2 million increased 4.2% due primarily to growth in the Mederma® brand and higher net sales in the Minoxidil franchise;
•Women's Health:Net sales of $52.7 million decreased 14.9% due primarily to the prior year reflecting the strong initial retailer stocking of Opill®, which launched in March 2024, of $15.0 million, or an impact to the category of 24.2%; and
•VMS and Other:Net sales of $9.9 million decreased 35.7% due primarily to volume declines in the VMS category.
Perrigo Company plc- Item 2
CSCA
Operating income increased $16.6 million, or 8.9%, due primarily to:
•$5.8 million increase in gross profit driven primarily by infant formula business recovery, benefits from our Supply Chain Reinvention Program and Project Energize, as well as lower materials inflation, partially offset by lower net sales volumes flow through primarily in U.S. OTC and unfavorable net pricing impacts. Gross profit as a percentage of net sales increased 120 basis points compared to the prior year due to the same factors that impacted gross profit.
•$10.8 million decrease in operating expenses driven by lower selling and administrative costs of $16.1 million due primarily to benefits from Project Energize and lower variable employee expenses, as well as decreased research and development expenses, partially offset by higher restructuring costs due primarily to Nutrition Network Optimization and Project Energize.
CONSUMER SELF-CARE INTERNATIONAL FINANCIAL RESULTS
Three Month Comparison
| Three Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 397.7 | $ | 416.3 | |||||||
| Gross profit | $ | 171.5 | $ | 185.0 | |||||||
| Gross profit % | 43.1 | % | 44.4 | % | |||||||
|
Operating income
|
$ | 37.4 | $ | 48.9 | |||||||
|
Operating income %
|
9.4 | % | 11.7 | % | |||||||
Net sales decreased $18.6 million, or 4.5%, due primarily to:
•$21.5 million decrease, or 5.3%, due primarily to unfavorable impacts across multiple OTC businesses due to soft category consumption including lower net sales of $8.4 million in the Upper Respiratorycategory, as a result of lower incidence and consumption of cough cold products and timing of cough cold sell-in to customers compared to the prior year, as well as lower net sales of $4.8 million in theVMScategory due primarily to deprioritization of nutraceuticals portfolio and lower net sales of $3.8 million from the Women's Health category due to supply constraints that have since been resolved, partially offset by new product sales of $6.8 million;
•$14.7 million decrease due to the prior year divestitures of the Hospital & Specialty Business and the Rare Diseases Business and the sale of branded products; partially offset by
•$17.6 million increase from favorable foreign currency translation.
Perrigo Company plc- Item 2
CSCI
CSCI net sales by product category were as follows:
| Sales | Three Months Ended | ||||||||||||||||||||||
|
(in millions, except percentages)
|
September 27, 2025 | September 28, 2024 | $ Change | % Change | |||||||||||||||||||
| Skin Care | $ | 91.7 | $ | 91.0 | $ | 0.7 | 0.8 | % | |||||||||||||||
| Upper Respiratory | 80.6 | 86.1 | (5.6) | (6.4) | % | ||||||||||||||||||
| Pain and Sleep-Aids | 56.3 | 56.9 | (0.6) | (1.1) | % | ||||||||||||||||||
| Healthy Lifestyle | 52.8 | 53.2 | (0.3) | (0.8) | % | ||||||||||||||||||
| VMS | 40.0 | 43.0 | (3.0) | (7.0) | % | ||||||||||||||||||
| Women's Health | 29.9 | 32.2 | (2.4) | (7.1) | % | ||||||||||||||||||
| Oral Care | 23.9 | 23.3 | 0.5 | 2.6 | % | ||||||||||||||||||
| Digestive Health | 10.6 | 9.0 | 1.6 | 17.8 | % | ||||||||||||||||||
| Other CSCI | 11.9 | 21.6 | (9.6) | (44.9) | % | ||||||||||||||||||
| Total CSCI | $ | 397.7 | $ | 416.3 | $ | (18.6) | (4.5) | % | |||||||||||||||
Sales in each category were driven primarily by:
•Skin Care:Net sales of $91.7 million increased 0.8%, inclusive of a 4.4% favorable effect of currency translation, due primarily to a 2.3% unfavorable impact from exited products and lower consumption, which were partially offset by higher net sales within the Compeed® franchise.
•Upper Respiratory: Net sales of $80.6 million decreased 6.4%, inclusive of a 4.9% favorable effect of currency translation, due primarily to lower incidence and consumption of cough cold products and timing of cough cold sell-in to customers compared to the prior year, partially offset by higher net sales of Physiomer®due to restored supply. The category was also impacted by a 1.4% unfavorable impact from exited products.
•Pain & Sleep-Aids:Net sales of $56.3 million decreased 1.1%, inclusive of a 4.1% favorable effect of currency translation, due primarily to a 3.2% unfavorable impact from exited products and timing of shipments, partially offset by restored supply of Solpadeine®.
•Healthy Lifestyle:Net sales of $52.8 million decreased 0.8%, inclusive of a 1.6% favorable effect of currency translation, driven by the strategic deprioritization of products within weight loss and lower consumption of the Paranix®and Lyclear®antiparasite brands due to lower seasonal incidence. These impacts were partially offset by growth of Nicotinell®smoking cessation offerings.
•VMS:Net sales of $40.0 million decreased 7.0%, inclusive of a 5.3% favorable effect of currency translation, due primarily to deprioritization of the nutraceuticals portfolio in addition to a 0.9% unfavorable impact from exited products.
•Women's Health:Net sales of $29.9 million decreased 7.1%, inclusive of a 4.6% favorable effect of currency translation, due primarily to supply constraints that have since been resolved.
•Oral Care: Net sales of $23.9 million increased 2.6%, inclusive of a 5.1% favorable effect of currency translation, due primarily to lower net sales of store brand products and a 1.6% unfavorable impact from exited products.
•Digestive Health and Other:Net sales of $22.5 million decreased 26.1%, inclusive of a 4.0% favorable effect of currency translation, primarily due to divested businesses, including HRA Pharma Rare Diseases, and exited products.
Perrigo Company plc- Item 2
CSCI
Operating income decreased $11.5 million, or 23.5%, due primarily to:
•$13.5 million decrease in gross profit due primarily to lower net sales volumes flow through, as well as $7.4 million from the impact of divested businesses and exited product lines. These factors were partially offset by $9.5 million increase from favorable currency translation. Gross profit as a percentage of net sales decreased 130 basis points compared to the prior year due to the same factors impacting gross profit.
•$2.0 million decrease in operating expenses driven by the absence of the prior year impairment charges of $16.2 million recognized as part of the assets held for sale of the Hospital & Specialty Business, and decreased administrative costs due primarily to lower variable employee expenses, partially offset by the absence of the prior year gain on the sale of branded products.
Nine Month Comparison
| Nine Months Ended | |||||||||||
| (in millions, except percentages) | September 27, 2025 | September 28, 2024 | |||||||||
| Net sales | $ | 1,255.1 | $ | 1,285.5 | |||||||
| Gross profit | $ | 564.0 | $ | 594.2 | |||||||
| Gross profit % | 44.9 | % | 46.2 | % | |||||||
| Operating income | $ | 136.2 | $ | 65.1 | |||||||
| Operating income % | 10.9 | % | 5.1 | % | |||||||
Net sales decreased $30.4 million, or 2.4%, due primarily to:
•$62.3 million decrease due to the prior year divestitures of the Rare Diseases Business and the Hospital & Specialty Business and the sale of branded products; partially offset by
•$23.7 million increase from favorable foreign currency translation;
•$8.2 million increase, or 0.7%, due primarily to growth of $15.1 million in the Pain & Sleep Aidscategory led by restored supply of theSolpadeine® brand, partially offset by unfavorable impacts across multiple OTC businesses due to soft category consumption, including lower net sales of $12.5 million in the VMS category.
CSCI net sales by product category were as follows:
| Sales | Nine Months Ended | ||||||||||||||||||||||
|
(in millions, except percentages)
|
September 27, 2025 | September 28, 2024 | $ Change | % Change | |||||||||||||||||||
| Skin Care | $ | 326.1 | $ | 333.5 | $ | (7.4) | (2.2) | % | |||||||||||||||
| Upper Respiratory | 209.5 | 206.0 | 3.5 | 1.7 | % | ||||||||||||||||||
| Healthy Lifestyle | 180.2 | 175.2 | 4.9 | 2.8 | % | ||||||||||||||||||
| Pain and Sleep-Aids | 173.4 | 158.6 | 14.9 | 9.4 | % | ||||||||||||||||||
| VMS | 116.2 | 127.4 | (11.2) | (8.8) | % | ||||||||||||||||||
| Women's Health | 103.3 | 101.2 | 2.2 | 2.2 | % | ||||||||||||||||||
| Oral Care | 71.6 | 75.0 | (3.4) | (4.6) | % | ||||||||||||||||||
| Digestive Health | 30.1 | 27.0 | 3.1 | 11.5 | % | ||||||||||||||||||
| Other CSCI | 44.7 | 81.5 | (37.0) | (45.3) | % | ||||||||||||||||||
| Total CSCI | $ | 1,255.1 | $ | 1,285.5 | $ | (30.4) | (2.4) | % | |||||||||||||||
Sales in each category were driven primarily by:
•Skin Care:Net sales of $326.1 million decreased 2.2%, inclusive of a 1.2% favorable effect of currency translation, due primarily to soft seasonal consumption trends compared to the prior year and the unfavorable impact of 2.0% from divested businesses and exited product lines. These factors were partially offset by share growth in Compeed®and Sebamed®, despite the soft seasonal trends;
Perrigo Company plc- Item 2
CSCI
•Upper Respiratory: Net sales of $209.5 million increased 1.7%, inclusive of a 2.6% favorable effect of currency translation, due primarily to improved supply of key products and growth in brand and store brand allergy products. These factors were more than offset by an unfavorable impact of 1.5% from divested businesses and exited product lines, and lower incidence and consumption of cough cold products;
•Healthy Lifestyle:Net sales of $180.2 million increased 2.8%, inclusive of a 0.5% unfavorable effect of currency translation, driven by growth in mosquito repellent products, in addition to growth of nicotine replacement offerings. This growth was partially offset by the strategic exit of products within the weight loss sub-category;
•Pain & Sleep-Aids:Net sales of $173.4 million increased 9.4%, inclusive of a 3.3% favorable effect of currency translation, as higher net sales of Solpadeine®, due primarily to improved supply, were partially offset by 3.8% from divested businesses and exited product lines;
•VMS:Net sales of $116.2 million decreased 8.8%, inclusive of a 2.4% favorable effect of currency translation, due primarily to deprioritization of the nutraceuticals portfolio, in addition to the unfavorable impact of 1.2% from divested businesses and exited products;
•Women's Health:Net sales of $103.3 million increased 2.2%, inclusive of a 2.6% favorable effect of currency translation, due primarily to higher net sales of contraceptive products including ellaOne®, driven by market share gains. These factors were more than offset by supply chain constraints that have since been resolved;
•Oral Care: Net sales of $71.6 million decreased 4.6%, inclusive of a 2.9% favorable effect of currency translation, due primarily to lower net sales of store brand products;
•Digestive Health and Other:Net sales of $74.8 million decreased 31.1%, inclusive of a 1.9% favorable effect of currency translation, due primarily to the divestiture of the Rare Diseases Business, which was partially offset by higher net sales of store brand digestive health products.
Operating income increased $71.1 million, or 109.2%, due primarily to:
•$30.2 million decrease in gross profit due primarily to the impact of divested businesses and exited products of $39.5 million, lower manufacturing productivity and unfavorable costs of goods sold inflation. These factors were partially offset by prior strategic pricing actions, $13.9 million from favorable currency translation, and new products. Gross profit as a percentage of net sales decreased 130 basis points compared to the prior year due to the same factors impacting gross profit.
•$101.3 million decrease in operating expenses due primarily to the absence of the prior year impairment charges of $50.3 million recognized as part of the assets held for sale of the Hospital & Specialty Business and the Rare Diseases Business, decreased restructuring costs associated primarily with Project Energize and Supply Chain Reinvention activities, and lower variable costs of $35.4 million. These were partially offset by the absence of the prior year gain on the sale of branded products.
Unallocated Expenses
Unallocated expenses are comprised of certain corporate services not allocated to our reporting segments and are recorded in Operating income (loss) on the Condensed Consolidated Statements of Operations. Unallocated expenses were as follows (in millions):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||
| $ | 59.5 | $ | 70.7 | $ | 175.0 | $ | 253.6 | |||||||||||||
The decrease of $11.2 million and $78.6 million in unallocated expenses during the three and nine months ended September 27, 2025, respectively, compared to the prior year periods were due primarily to a decrease in expenses for litigation, as well as lower selling and administrative costs due primarily to Project Energize.
Perrigo Company plc- Item 2
Unallocated, Interest, Other, and Taxes
Interest expense, net, Other (income) expense, net and Loss on extinguishment of debt
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Interest expense, net | $ | 40.6 | $ | 57.6 | $ | 119.2 | $ | 144.7 | |||||||||||||||
| Other (income) expense, net | $ | 9.6 | $ | (4.1) | $ | 11.9 | $ | (0.5) | |||||||||||||||
| Loss on extinguishment of debt | $ | - | $ | 5.1 | $ | - | $ | 5.2 | |||||||||||||||
Interest expense, net
The $17.0 million and $25.5 million decrease in Interest expense, net during the three and nine months ended September 27, 2025, respectively, compared to the prior year periods was due primarily to the absence of interest expense associated with the de-designation of interest rate swap agreements in the prior year and a decrease in interest expense associated with a decrease in outstanding borrowings under our Senior Secured Credit Facilities.
Other (income) expense, net
The $13.7 million and $12.4 million decrease in Other (income) expense, net during the three and nine months ended September 27, 2025, respectively, compared to the prior year periods was due primarily to unfavorable changes in revaluation of foreign currency contracts associated with the planned divestiture of the Dermacosmetics Business, the absence of prior year gain recognized on the sale of the Rare Diseases Business, and the loss recognized on the sale of the Richard Bittner Business.
Loss on extinguishment of debt
The loss on extinguishment of debt during the three and nine months ended September 28, 2024 is related to the unamortized fees associated with the partial payment on the Term Loan B Facility (refer to Item 1. Note 12).
Income Taxes (Consolidated)
The effective tax rates were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||
| 43.3 | % | 180.9 | % | 63.7 | % | 20.9 | % | |||||||||||||
The effective tax rate on the pre-tax income for the three months ended September 27, 2025, decreased when compared to the effective tax rate on the pre-tax income for the three months ended September 28, 2024, primarily due to tax benefits resulting from the enactment of the One Big Beautiful Bill Act ("OBBBA") and the impacts of accounting for income taxes in interim reporting periods, offset by changes in reserves for uncertain tax positions. The effective tax rate on pre-tax income for the nine months ended September 27, 2025 increased when compared to the effective tax rate on the pre-tax loss for the nine months ended September 28, 2024 primarily due to changes in reserves for uncertain tax positions, offset by the impact of the OBBBA, and the impacts related to accounting for income taxes in interim reporting periods for 2024. For 2024, the accounting for income taxes in interim reporting periods resulted in a significant variation in the customary relationship between income tax expense and pre-tax book income, which does not significantly impact 2025.
On July 4, 2025, the OBBBA was signed into law. The OBBBA includes significant changes to federal tax law and permanently extends various provisions from the 2017 Tax Cuts and Jobs Act, including, but not limited to, deductions for federal bonus depreciation, domestic research and development expenditures, and business interest expense. We evaluated the OBBBA provisions enacted during the quarter and estimate that the impact will result in a tax benefit of $28.0 million for 2025, primarily due to the increased realizability of deferred tax assets associated with interest expense carryforwards following the restoration of depreciation and amortization in the Section 163(j) business interest expense limitation calculation. The remaining provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are not anticipating the remaining provisions of the OBBBA to have a material effect on our consolidated financial statements.
Perrigo Company plc- Item 2
Unallocated, Interest, Other, and Taxes
We evaluate our deferred tax assets quarterly to determine if valuation allowances are required or should be adjusted. This assessment considers, among other matters, the nature, frequency and amount of recent losses, the duration of statutory carryforward periods, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. If operational results continue to decline in certain jurisdictions where we have deferred tax assets that rely on future taxable income, primarily the United States, an additional valuation allowance may be required in the next twelve months. Such amount could be a material charge to income tax expense subject to the presentation requirements of intraperiod tax allocation.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
Overview
We finance our operations with internally generated funds, supplemented by credit arrangements with third parties and capital market financing. We routinely monitor current and expected operational requirements and financial market conditions to evaluate other available financing sources including term and revolving bank credit and securities offerings. In determining our future capital requirements, we regularly consider, among other factors, known trends and uncertainties, such as the war in Ukraine and conflicts in the Middle East, inflation and interest rates, the status of material contingent liabilities, recent financial market volatility, tariffs and potential tariff and trade policies and other uncertainties. Additionally, we have considered investments in capital expenditures related to the progression of infant formula plant investments, our Supply Chain Reinvention Program, and Project Energize. Subject to relevant restrictions under our debt agreements, our cash requirements for other purposes and other factors management deems relevant, we may from time to time use available funds to redeem, repurchase or refinance our debt in privately negotiated or open market transactions, by tender offer or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms we deem appropriate (which may be below par).
Based on the foregoing, management believes that our operations and borrowing resources are sufficient to provide for our short-term and long-term capital requirements, as described below. However, an adverse result with respect to our appeal of any material outstanding tax assessments or litigation, including securities or drug pricing matters and product liability cases, damages resulting from third-party claims, and related interest and/or penalties, could ultimately require the use of corporate assets to pay such assessments and any such use of corporate assets would limit the assets available for other corporate purposes. As such, we continue to evaluate the impact of the above factors on liquidity and may determine that modifications to our capital structure are appropriate if market conditions deteriorate, favorable capital market opportunities become available, or any change in conditions relating to the war in Ukraine and conflicts in the Middle East, a government shutdown in the United States or elsewhere, inflation and interest rates, the status of material contingent liabilities, financial market volatility, tariffs, potential tariff and trade policies or other uncertainties have a material impact on our capital requirements.
Cash and Cash Equivalents
| (in millions) | September 27, 2025 | December 31, 2024 | |||||||||
| Cash and cash equivalents | $ | 432.1 | $ | 558.8 | |||||||
|
Working capital(1)
|
$ | 1,095.3 | $ | 915.3 | |||||||
(1) Working capital represents current assets less current liabilities, excluding cash and cash equivalents, assets and liabilities held for sale and current indebtedness.
Cash, cash equivalents, cash flows from operations, and borrowings available under our credit facilities are expected to be sufficient to finance our liquidity and capital expenditures in both the short and long term. Although our lenders have made commitments to make funds available to us in a timely fashion under our revolving credit agreements and overdraft facilities, if economic conditions worsen or new information becomes publicly available impacting the institutions' credit rating or capital ratios, these lenders may be unable or unwilling to lend money pursuant to our existing credit facilities. Should our outlook on liquidity requirements change substantially from current projections, we may seek additional sources of liquidity in the future.
Perrigo Company plc- Item 2
Financial Condition, Liquidity and Capital Resources
Cash Flows
The following table includes summarized cash flow activities:
| Nine Months Ended | |||||||||||||||||
| (in millions) | September 27, 2025 | September 28, 2024 | $ Change | ||||||||||||||
| Net cash from operating activities | $ | 63.1 | $ | 50.3 | $ | 12.8 | |||||||||||
| Net cash (for) from investing activities | (50.9) | 115.9 | (166.8) | ||||||||||||||
| Net cash (for) from financing activities | (166.1) | 543.1 | (709.2) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 29.5 | 2.9 | 26.6 | ||||||||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (124.4) | $ | 712.2 | $ | (836.6) | |||||||||||
Net cash from Operating Activities
The $12.8 million increase in operating cash flow was primarily driven by an improved net loss position and an increase in cash flow from the change in net earnings after adjustments for items including depreciation and amortization and restructuring, partially offset by an increase in working capital.
Net cash (for) from Investing Activities
The $166.8 million decrease in investing cash flow was due primarily to the absence of the proceeds from the sale of the Rare Diseases Business and the six branded products in the prior year period. These were partially offset by the absence of the settlement of foreign currency derivatives in the prior year period, as well as net proceeds received in the current period related to the sale of the Richard Bittner Business.
Net cash (for) from Financing Activities
The $709.2 million decrease in financing cash flow was due primarily to the prior year period issuance of the 2032 Notes, partially offset by larger one-time payments in the prior year period on the Senior Secured Credit Facilities compared to the current year.
Borrowings and Capital Resources
Credit Agreements
On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the "Borrower") entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the "Revolver"), (ii) a $500.0 million five-year Term Loan A facility (the "Term Loan A Facility" and the Term A Loans thereunder, the "Term A Loans"), and (iii) a $1.1 billion seven-year Term Loan B facility (the "Term Loan B Facility" and the Term B Loans thereunder borrowed on April 20, 2022, the "2022 Term B Loans" and, together with the Revolver and Term Loan A Facility, the "Senior Secured Credit Facilities"), pursuant to a Term Loan and Revolving Credit Agreement (the "Credit Agreement").
On December 15, 2023, we and the Borrower entered into Amendment No. 1, an Incremental Assumption Agreement (the "Amendment") to the Credit Agreement. The Amendment provides for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the "Incremental Term B Loans" and together with the 2022 Term B Loans, the "Term B Loans"). The terms of the Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The Term B Loans will mature on April 20, 2029. The net proceeds from the Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 ("2024 Notes"). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest).
On December 15, 2024, we and the Borrower entered into Amendment No. 2 to the Credit Agreement, that provides for the refinancing of the Term B Loans outstanding under the Credit Agreement in the aggregate amount of $984.7 million. Refer to Item 1. Note 12.
Perrigo Company plc- Item 2
Financial Condition, Liquidity and Capital Resources
As of September 27, 2025 and December 31, 2024, we had $1,403.0 million and $1,429.1 million, respectively, outstanding under our Term Loan A Facility and Term Loan B Facility. Our short-term debt as of September 27, 2025 of $36.6 million is comprised of (i) amortization payments for the Term A Loans and the Term B Loansand (ii) lease payments.
The interest rate net of derivatives results in a fixed rate on a substantial portion of our long-term debt, the earliest of which matures in April 2027.
We were in compliance with all the covenants under our debt agreements as of September 27, 2025.
Other Financing
We have overdraft facilities available that we may use to support our cash management operations. There were no material borrowings outstanding under the overdraft facilities as of September 27, 2025 or December 31, 2024.
Leases
We had $194.3 million and $195.1 million of lease liabilities and $180.9 million and $186.9 million of lease assets as of September 27, 2025 and December 31, 2024, respectively. For information on our operating and finance lease obligations and the amount and timing of future payments refer to Item 1. Note 8.
Credit Ratings
Our credit ratings on September 27, 2025 were Ba2 (negative), BB- (stable), and BB (negative), by Moody's Investor Services, S&P Global Ratings ("S&P"), and Fitch Ratings Inc. ("Fitch"), respectively.
Credit rating agencies review their ratings periodically, and therefore, the credit rating assigned to us by each agency may be subject to revision at any time. Accordingly, there can be no assurance that our credit ratings will remain as disclosed above. Factors that can affect our credit ratings include, but are not limited to, changes in operating performance, the economic environment, our financial position, and changes in business strategy. If changes in our credit ratings were to occur, they could impact, among other things, future borrowing costs, access to capital markets, and vendor financing terms. A credit rating is not a recommendation to buy, sell or hold securities.
Future interest rate adjustments of the 3.150% Senior Notes due 2030 are subject to a 2.0% total cap above the original 3.150% interest rate which would result in an interest rate not to exceed 5.150% based on certain rating events as specified in the Note's Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc and Wells Fargo Bank, National Association, as trustee.
Guarantor Financial Information
As detailed in Item 1. Note 12, the Guarantor Subsidiaries and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Loan Parties provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 4.900% Notes due 2030, the 5.375% Euro Notes due 2032, the 6.125% USD Notes due 2032, and the 4.900% Notes due 2044 issued by Perrigo Finance.
The guarantees of the Guarantor Subsidiaries, the Company and the Borrower are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The guarantees of the Guarantor Subsidiaries, the Company and the Borrower rank senior in right of payment to any future subordinated indebtedness of the Company, equal in right of payment with all of the Company's existing and future senior indebtedness and effectively subordinated to any of the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness.
Perrigo Company plc- Item 2
Financial Condition, Liquidity and Capital Resources
Basis of Presentation
The following tables include summarized financial information of the obligor groups of debt issued by Perrigo Finance and the Company. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with U.S. GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.
The summarized balance sheet information for the consolidated obligor group of debt issued by Perrigo Finance and the Company is presented in the table below:
| September 27, 2025 | December 31, 2024 | ||||||||||
| Current assets | $ | 1,952.0 | $ | 1,792.5 | |||||||
| Non-current assets | $ | 4,110.3 | $ | 4,284.5 | |||||||
| Current liabilities | $ | 865.8 | $ | 731.8 | |||||||
| Non-current liabilities | $ | 11,710.4 | $ | 12,144.5 | |||||||
| Due to non-guarantors | $ | 7,584.5 | $ | 8,131.3 | |||||||
The summarized results of operations information for the consolidated obligor group of debt issued by Perrigo Finance and the Company is presented in the table below:
| Nine Months Ended | |||||
| September 27, 2025 | |||||
| Total revenues | $ | 2,238.7 | |||
| Gross profit | $ | 678.8 | |||
| Operating income (loss) | $ | (16.7) | |||
| Net income (loss) | $ | (266.7) | |||
| Revenue from non-guarantors | $ | 288.2 | |||
| Operating expenses to non-guarantors | $ | (0.4) | |||
| Other (income) expense to non-guarantors | $ | (76.6) | |||
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our financial condition, changes in financial condition, net sales or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Contractual Obligations
There were no material changes in contractual obligations as of September 27, 2025 from those provided in our 2024 Form 10-K.
Significant Accounting Policies
There have been no material changes to the significant accounting policies as disclosed in our 2024 Form 10-K.
Critical Accounting Estimates
The determination of certain amounts in our financial statements requires the use of estimates. These estimates are based upon our historical experiences combined with management's understanding of current facts and circumstances. Although the estimates are considered reasonable based on the currently available information, actual results could differ from the estimates we have used. There have been no material changes to the critical accounting estimates as disclosed in our 2024 Form 10-K.
Perrigo Company plc- Item 3
Quantitative and Qualitative Disclosures
Perrigo Company plc published this content on November 05, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 05, 2025 at 20:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]