Perrigo Company plc reported third‑quarter 2025 results on November 5, 2025, with net sales of $1.043 billion—a 4.1% year‑over‑year decline driven by softer over‑the‑counter (OTC) consumption and a shift in product mix toward lower‑margin store‑brand items. Adjusted earnings per share were $0.80, slightly below the $0.81 reported in the same quarter a year earlier, and a $0.05 beat over the consensus estimate of $0.75.
Gross margin contracted to 36.1% from 37.2% a year ago, reflecting the combined impact of lower sales volume and a less favorable mix of store‑brand products. Operating income fell to $73 million, a decline of 8.75% from $80 million in the prior year, largely because the revenue drop and margin compression outweighed the cost‑saving benefits of the company’s Project Energize program and favorable currency translation.
Management highlighted that the quarter’s performance was supported by a $9 million supply‑chain savings initiative under Project Energize, but the company did not disclose a specific dollar amount for the currency benefit. The firm also announced a strategic review of its infant‑formula business as part of its Three‑S plan—Stabilize, Streamline, Strengthen—aiming to divest lower‑margin assets and focus on higher‑margin branded products.
In light of the softer OTC market and the infant‑formula review, Perrigo lowered its full‑year 2025 adjusted EPS guidance to $2.70–$2.80 from the previously reiterated $2.90–$3.10. The guidance cut signals management’s concern about near‑term demand dynamics, while the company remains confident in its ability to maintain profitability through cost discipline and market‑share gains in key store‑brand categories.
Investors reacted negatively to the earnings release, with pre‑market trading showing a decline. The market’s focus on the revenue miss—$60 million below the $1.10 billion consensus—and the downward revision of full‑year guidance outweighed the EPS beat, underscoring a preference for top‑line growth and forward guidance.
CEO Patrick Lockwood‑Taylor noted, “While OTC consumption was increasingly soft in the third quarter, the Perrigo team delivered strong in‑market performance. We gained dollar, unit and volume share in five of seven store‑brand categories and grew share in our key brands, a clear sign that consumers are choosing Perrigo products at the shelf.” He added, “This proactive review of infant formula is about discipline and ensuring the Company’s portfolio is best positioned for sustainable growth and free cash flow generation.”
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