Key Highlights

  • Third quarter net sales fell 5.2% to USD 989 million, topping the USD 984.8 million estimate.
  • Adjusted EPS of USD 0.60 beat the USD 0.51 estimate but declined from USD 0.80 a year earlier.
  • Reported diluted EPS was a loss of USD 0.10, compared with a profit of USD 0.09 last year.
  • Infant Formula would be sold for up to USD 175 million, with just USD 40 million paid upfront.

Perrigo (NYSE:PRGO) reported third quarter net sales of USD 989 million, down 5.2% from USD 1,043 million a year earlier but above the USD 984.8 million estimate. Adjusted diluted EPS on an All In basis was USD 0.60, ahead of the USD 0.51 estimate and down 25.0% from USD 0.80. On a reported basis, the company posted a diluted loss of USD 0.10 per share, against Earnings of USD 0.09 in the prior-year quarter. Results cover the quarter ended September 26, 2026.

Segment Trends and Margin Pressure

Core net sales, which exclude Infant Formula and earlier divestitures, were USD 908 million, down 1.7%, with Organic Sales down 1.1%. Management cited lower consumption in Self Care, more cautious retailer inventory ahead of cough and cold season, and lower contract Manufacturing volumes, partly offset by share gains in U.S. store Brand over-the-counter products and key European brands.

Self Care net sales declined 3.2% to USD 613 million and segment adjusted Operating Income dropped 19.4% to USD 105 million. Specialty Care sales fell 4.6% to USD 182 million, and Infant Formula sales declined 9.6% to USD 81 million.

All In adjusted gross margin fell 370 basis points to 36.3%, and adjusted Operating Margin fell 360 basis points to 13.1%. Core adjusted gross margin was 37.9%, down 140 basis points, and Core adjusted operating margin was 14.3%, down 210 basis points. Core adjusted EPS was USD 0.61, down 9.0%, helped by an adjusted tax rate of 3.5% that added USD 0.10.

Infant Formula Sale and Balance Sheet

After the quarter, Perrigo agreed to divest Infant Formula for total consideration of up to USD 175 million. That includes USD 40 million in cash at closing and up to USD 135 million tied to net sales milestones through 2030. The company projects an Impairment loss of USD 275.0 million to USD 375.0 million in the fourth quarter. Interim chief executive Albert Manzone said the sale would simplify the portfolio, lift the margin profile and reduce future Capital spending. A strategic review of the Oral Care Business remains ongoing.

Operating cash flow was USD 96 million, capital expenditures were USD 18 million, and dividends totaled USD 40 million. Cash stood at USD 437 million against total Debt of USD 3.3 billion.

Updated 2026 Outlook

Perrigo now reports Infant Formula as discontinued operations from the fourth quarter. The All In outlook calls for net sales growth of negative 5.7% to negative 4.6%, adjusted gross margin of 37.8% to 38.8%, adjusted operating margin of 14.3% to 15.3% and adjusted EPS of USD 2.25 to USD 2.45. Prior All In guidance, which included Infant Formula, was adjusted EPS of USD 2.00 to USD 2.30.

The Core outlook is adjusted EPS of USD 2.15 to USD 2.35, down from USD 2.25 to USD 2.55, with adjusted operating margin of 14.0% to 15.0%, against 15.0% to 16.0% before. Other assumptions include net interest expense near USD 162 million, an adjusted tax rate near 14.0% and net Leverage near 4.0 times adjusted EBITDA.

Signposts for the Next Quarter

Third quarter adjusted EPS of USD 0.60 compares with the full year All In range of USD 2.25 to USD 2.45 and a prior-year quarter of USD 0.80. Net sales of USD 989 million compare with USD 1,043 million a year earlier, while cash of USD 437 million compares with debt of USD 3.3 billion. The USD 40 million upfront Infant Formula payment compares with USD 135 million in contingent milestones.