Perrigo Reports Second Quarter 2025 Financial Results From Continuing Operations Company Advanced its Three-S' Plan (Stabilize, Streamline, and Strengthen) with Recently Announced Agreement to Sell Dermacosmetics Busines

Perrigo Reports Second Quarter 2025 Financial Results From Continuing Operations

Company Advanced its Three-S' Plan (Stabilize, Streamline, and Strengthen) with Recently Announced Agreement to Sell Dermacosmetics Business, Scaling of Global Operating Growth Model, and Upgraded Brand Building Capabilities that are Delivering Results

Solid Execution Amid Challenging Market Consumption Trends

Reaffirms Full Year 2025 Adj. EPS Target Range of $2.90 - $3.10

Second Quarter 2025 YoY Highlights

Net Sales $1.06 billion, down 0.9% year-over-year. Favorable currency translation (+1.7%) was more than offset by the impact of divestitures and exited products (-2.5%) and a slight decline in organic1 net sales (-0.1%).

Organic Net Sales Growth primarily in Pain Sleep Aids, Nutrition, and Upper Respiratory categories was offset by declines primarily in Digestive Health and Oral Care.

Reported Operating Income $45 million vs. a loss of $27 million in the prior year.

Adjusted Operating Income $135 million, down $4 million (2.9%), reflecting isolated production variability in infant formula leading to an increase in product scrap in the quarter, lower plant overhead absorption in OTC and Oral Care, and the impact of divestitures and exited products - partially offset by reduced advertising and promotional (A P) spend, Project Energize benefits, and favorable FX. Organic operating income was flat.

Operating Margin Reported 4.3% (+680 basis points YoY) Adjusted 12.8% (-30 basis points or flat organically YoY).

Diluted EPS Reported EPS $0.00, improved from $(0.77) in the prior year. Adjusted EPS $0.57, up $0.04 (+7.5% or +12.5% organically), driven by lower interest expense from reduced debt. Includes a $0.05 headwind from divestitures and exited products, and a $0.03 tailwind from FX.

Second Quarter 2025 YoY Segment Highlights

Consumer Self-Care International (CSCI)

Net Sales $434 million, up 0.7%.

Organic net sales growth of +2.7%, driven by Pain Sleep Aids and Upper Respiratory, partially offset by Skin Care and VMS (Vitamins, Minerals and Supplements).

Currency tailwind of +4.2% divestitures and exited products impact of -6.2%.

Consumer Self-Care Americas (CSCA)

Net sales $622 million, down 1.9%.

Net sales growth was led by Nutrition, Upper Respiratory, and Healthy Lifestyle, which were more than offset primarily by declines in Digestive Health and Oral Care.

Perrigo OTC store brands gained unit and volume share(2) during the quarter.

First Half 2025 YoY Highlights

Net Sales $2.10 billion, down 2.2% year-over-year, reflecting 1) -1.9% net impact from divestitures, exited products and favorable FX, and 2) -0.3% organic decline.

Organic Net Sales The absence of prior-year Opill launch stocking benefit in Women's Health of -0.7% and previously disclosed lost distribution of lower-margin U.S. store brand products of -0.2% were mostly offset by growth of +0.7% in the rest of the business.

Reported Operating Income $92 million vs. a loss of $(82) million in the prior year period.

Adjusted Operating Income $282 million, up +21.3%, driven by higher gross profit and benefits from Project Energize and Supply Chain Reinvention, partially offset by lower plant overhead absorption and OTC volumes, divestitures and exited products.

Diluted EPS Reported loss per share $0.00, improved from $(0.74) in the prior year period. Adjusted EPS $1.17, up from $0.83 (+41.0%, or +53.3% organically). Includes $0.08 negative impact from divestitures and exited products, and $0.02 benefit from FX.

Operating Cash Flow YTD $11 million, reflecting cash outflow of $(65) million in the first quarter and cash inflow of +$76 million in the second quarter. Cash and cash equivalents on the balance sheet as of June 28, 2025, were $454 million.

First Half 2025 YoY Segment Highlights

Consumer Self-Care International (CSCI)

Net sales $857 million, down 1.4%.

Organic net sales growth of +3.6%, led by Pain Sleep Aids, notably from Solpadeine supply restoration, and Upper Respiratory, with improved product supply of a key product and slightly higher cough cold incidence levels in Q1 YoY.

Consumer Self-Care Americas (CSCA)

Net sales $1.24 billion, down 2.8%.

Organic net sales declined 2.7%, as growth in Nutrition, led by recovery in infant formula, and Upper Respiratory, driven by higher cough cold incidence levels in Q1 YoY, was more than offset by lower net sales in Digestive Health, due to reduced consumption of specific molecules, -1.2% from the absence of prior-year Opill launch benefit, and -0.7% from lost U.S. store brand distribution.

Fiscal Year 2025 Outlook

While reported and organic net sales growth are expected to be towards the lower end of their respective ranges, due primarily to infant formula industry dynamics and market consumption trends, the Company reaffirms all of its full-year 2025 financial targets. (See "Fiscal 2025 Outlook" section for details.)

(1) See attached Appendix for details. Change in net sales on an organic basis excludes the effects of acquisitions, divestitures and exited products, and the impact of currency.

(2) Share gains according to Circana 13-weeks ending 6 15 25 vs. prior year 13-weeks ending 6 15 24 in the categories where Perrigo participates in cough cold, allergy, digestive health, pain, nicotine replacement, skin care and women's health.

(3) All tables and data may not add due to rounding. Percentages are based on actuals.

(4) Free cash flow derived from operating cash flow less capital expenditures.

Dublin, Ireland - August 6, 2025 - Perrigo Company plc (NYSE PRGO) ("Perrigo" or the "Company"), a leading provider of Consumer Self-Care Products, today announced financial results from continuing operations for the second quarter ended June 28, 2025 of fiscal year 2025. All comparisons are against the prior year second quarter, unless otherwise noted.

President and CEO Patrick Lockwood-Taylor commented, Our second quarter results reflect the continued execution by the global Perrigo team against our 'Three-S' strategic plan. Despite a challenging consumer environment in the U.S. and EU, our diversified portfolio-spanning more molecules at more price points-continues to provide resilience and stability. Our upgraded brand building capabilities are generating positive results as our store brands and key brands are gaining share in their respective markets-demonstrating the strength of our diversified business even amid soft seasonal consumption trends in certain segments, such as allergy, sun care and blister care.

Lockwood-Taylor concluded, "The previously announced sale of our Dermacosmetics business, which is expected to close in the first quarter of 2026, sharpens our organizational focus. Expected net proceeds from this transaction will be prioritized towards strengthening our balance sheet and accelerating our net leverage goals. While recovery in our infant formula business continues, it is slower than anticipated. This, coupled with challenging market consumption, has led to our expectations for 2025 topline growth to be towards the lower ends of our previously stated ranges. However, our share gains, operating discipline and cost efficiencies are enabling us to reaffirm our full-year earnings outlook. Our unique offerings continue to support agile execution in a dynamic environment, and we remain confident in Perrigo's ability to drive sustainable growth and create long-term value for shareholders."

Refer to Tables I through VII at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company's reported results are included in the attached Condensed Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.

Project Energize, launched during the first quarter of 2024, is 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 its One Perrigo growth strategy, increasing organizational agility and resetting the SG A operating expense base.

Project Energize 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 $40 million to $60 million of these savings to be reinvested. 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. Since the beginning of the program in 2024, Project Energize has achieved gross annual savings of approximately $159 million with reinvestment of $27 million. Restructuring charges incurred by the Company over the same period in connection with Project Energize were $118 million.

Perrigo Second Quarter 2025 Results from Continuing Operations

(3) All tables and data may not add due to rounding. Percentages are based on actuals.

Net sales of $1.06 billion decreased 0.9%, or $9 million, due primarily to unfavorable impacts of 2.5% from divested businesses and exited products, which were partially offset by favorable currency translation of 1.7%.

Organic net sales comprised net pricing of -0.6% and volume mix of +0.5%.

Organic net sales were -0.1% as growth was driven by higher net sales in 1) the Pain and Sleep-Aids category, led by improved supply of the Solpadeine brand, 2) the Nutrition category, driven by continued recovery in the infant formula business, and 3) the Upper Respiratory category, primarily from new distribution and share gains in U.S. store brand allergy amid softer seasonality, in addition to restored supply of the Physiomer brand. These drivers were more than offset by lower net sales in 1) the Digestive Health category, due to lower consumption of specific molecules, 2) the Oral Care category, due to lost distribution of lower margin products, and 3) the VMS category due primarily to deprioritization of nutraceuticals products.

Reported gross profit of $363 million, decreased $32 million, or 8.1%. Adjusted gross profit of $403 million decreased $30 million, or 6.9%, due primarily to divested businesses and exited products of $18 million. The remaining decline was due primarily to isolated production variability in infant formula, leading to an increase in product scrap in the quarter and lower plant overhead absorption in U.S. OTC and Oral Care. These factors were partially offset by Supply Chain Reinvention benefits, Project Energize savings and favorable currency translation of $11 million. Organic gross profit decreased 5.5%.

Reported gross margin was 34.4%, a decrease of 260 basis points. Adjusted gross margin decreased 250 basis points to 38.1%, due primarily to the same factors as adjusted gross profit, partially offset by favorable brand store brand mix. Divested businesses and exited products unfavorably impacted gross margin by 70 basis points.

Reported operating income was $45 million as compared to a loss of $27 million. Adjusted operating income decreased $4 million, or 2.9%, to $135 million as lower gross profit was largely offset by lower A P investments, driven in part by soft seasonal consumption, and Project Energize benefits. Favorable currency translation was $6 million and the impact of divested businesses and exited products was $9 million. Organic operating income was flat compared to the prior year quarter.

Reported operating margin was 4.3%, an increase of 680 basis points. Adjusted operating margin of 12.8% decreased 30 basis points versus the prior year quarter due primarily to the same factors as adjusted operating income and included an unfavorable impact of 50 basis points from divested businesses and exited products.

Reported net loss was $(1) million and reported loss per share was $0.00 compared to reported net loss of $(106) million and ($0.77) per share in the prior year. Adjusted net income was $79 million, or $0.57 per share, compared to $74 million, or $0.53 per share, an increase of $0.04 or 7.5% (12.5% organically) per share, as lower operating income was more than offset by lower interest expense. Second quarter 2025 adjusted EPS included an impact from divested businesses and exited products of $0.05 per share and favorable currency translation of $0.03 per share.

Second Quarter 2025 Business Segment Results from Continuing Operations

Consumer Self-Care Americas Segment (CSCA)

(3) All tables and data may not add due to rounding. Percentages are based on actuals.

CSCA net sales of $622 million declined $12 million, or 1.9%, as higher net sales in the 1) Nutrition category, due primarily to continued recovery of infant formula, 2) Healthy Lifestyle category, stemming from store brand share gains in smoking cessation products, and 3) Upper Respiratory category, primarily from new distribution in U.S. store brand allergy products and share gains amid soft seasonality. This growth was more than offset by lower net sales in the 1) Digestive Health category, due to lower consumption of specific molecules, principally proton pump inhibitors for heartburn, and 2) Oral Care category, due to lost distribution of lower margin products. Perrigo OTC store brands gained unit and volume share(2) during the quarter.

Reported gross profit of $163 million decreased $27 million, or 14.2%. Adjusted gross profit decreased $26 million, or 12.8%, to $176 million as Supply Chain Reinvention and Project Energize benefits were more than offset by lower plant overhead absorption in OTC and Oral Care, and isolated production variability in infant formula, leading to an increase in product scrap in the quarter.

Reported gross margin of 26.2% decreased 370 basis points. Adjusted gross margin decreased 350 basis points to 28.2%, driven by the same factors as adjusted gross profit.

Reported operating income was $45 million compared to $69 million, a decrease of $24 million, or 34.9%. Adjusted operating income decreased $20 million, or 22.2%, to $71 million as lower A P and R D investments and Project Energize benefits were more than offset by lower gross profit flow through and higher administration costs.

Reported operating margin of 7.3% decreased 360 basis points. Adjusted operating margin decreased 300 basis points to 11.4%, driven by the same factors as adjusted operating income.

Consumer Self-Care International Segment (CSCI)

(3) All tables and data may not add due to rounding. Percentages are based on actuals.

CSCI net sales of $434 million increased 0.7%, or $3 million, as organic net sales growth of 2.7% and favorable currency translation of 4.2% were partially offset by divested businesses and exited products of 6.2%.

Organic net sales growth was primarily driven by higher net sales in the 1) Pain and Sleep Aids category, led by improved supply of the Solpadeine brand, 2) Upper Respiratory category, led by restored supply of the Physiomer brand, and 3) Women's Health category, led by strong share gains in ellaOne . This growth was partially offset by lower net sales in the 1) Skin Care category, due primarily to the reclassification of products into other categories and the impact of exited products, partially offset by share growth in Compeed and Sebamed , despite the soft seasonal trends, and 2) VMS category due primarily to deprioritization of nutraceuticals products.

Reported gross profit of $200 million decreased $5 million, or 2.2%. Adjusted gross profit of $227 million decreased $4 million, or 1.7%, as prior strategic pricing actions, Supply Chain Reinvention benefits, and $10 million from favorable currency translation were more than offset by cost of goods sold inflation and $18 million from the impact of divested businesses and exited products. Organic gross profit grew 1.7% compared to the prior year quarter.

Reported gross margin of 46.1% decreased 140 basis points. Adjusted gross margin declined 130 basis points to 52.4%, driven primarily by the same factors as adjusted gross profit. Divested businesses and exited products had an unfavorable impact of 90 basis points.

Reported operating income was $59 million compared to a loss of $10 million, an increase of $70 million. Adjusted operating income of $103 million increased $12 million, or 13.0%, as the increase in organic gross profit flow through, benefits from Supply Chain Reinvention and Project Energize, lower A P investments due in part to lower seasonal consumption, and favorable currency translation of $5 million more than offset divested businesses and exited product lines of $9 million.

Reported operating margin was 13.6%, a 1,600 basis points increase. Adjusted operating margin expanded 260 basis points to 23.6%, as operating leverage more than offset the unfavorable impact of 70 basis points from divested businesses and exited products.

Cash Flow and Balance Sheet

Year-to-date operating cash flow was $11 million, reflecting cash outflow of $(65) million from the first quarter and cash inflow of $76 million from the second quarter. As a reminder, first quarter cash outflow was driven by cash utilized to rebuild inventory in the infant formula business, settle outstanding litigation and cover Project Energize restructuring costs.

Year-to-date capital expenditures were $45 million and the Company returned $80 million to shareholders through dividends.

Cash and cash equivalents on the balance sheet as of June 28, 2025, were $454 million and total debt on the balance sheet was $3.65 billion.

Known Impacts from Macroeconomic Uncertainty

Perrigo is the largest U.S. manufacturer of OTC self-care products by volume, which are produced by 11 U.S. manufacturing facilities with 85% of finished goods manufactured in the U.S., using 50% of materials and components sourced from the U.S. The Company continues to closely follow the evolving environment on global tariffs and actively assess potential business implications.

Based on current assessments, excluding any potential impact from pharmaceutical tariffs that may cover ingredients used in the manufacturing of OTC products, the Company estimates 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 $50 million to $60 million, on a full-year basis. The Company plans to offset these impacts through a combination of strategic pricing actions, insourcing to its U.S.-based manufacturing facilities and other supply chain actions.

The Company believes that its unique business model with 100+ molecules across 100% price point coverage and significant U.S. based manufacturing provides an advantage and significant opportunities to deliver more essential self-care solutions to customers and consumers in this evolving landscape. As consumer prices are likely to rise, Perrigo's store brand and value brand offerings may benefit from shifting consumer behavior across the value spectrum.

Please refer to Perrigo's latest Form 10-K for the year ended December 31, 2024 and 10-Q for the quarter ended June 28, 2025 for a detailed discussion of risk factors.

The Company reaffirms its fiscal year 2025 outlook. Reported and organic net sales growth are expected towards the lower end of their respective ranges, primarily due to infant formula industry dynamics and challenging market consumption trends. Details provided below

Reported net sales growth of 0% to 3%.

Organic net sales growth of 1.5% to 4.5%.

Adjusted gross margin of approximately 40%.

Adjusted operating margin of approximately 15%.

Adjusted diluted EPS range of $2.90 to $3.10, equating to growth of 13% to 21%.

Operating cash flow conversion to adjusted net income of approximately 100%.

Free cash flow4 as a percentage of net sales of approximately 6%.

Net leverage of approximately 3.5x adjusted EBITDA.

Perrigo Company plc is a leading pure-play self-care company with over a century of experience in providing high-quality health and wellness solutions to consumers primarily in North America and Europe. As a pioneer in the over-the-counter (OTC) self-care market, Perrigo offers trusted self-care solutions that can be used without the need for a prescription, ensuring accessibility and choice for consumers across molecules, dosage forms, and value tiers.

Perrigo's unique business model leverages its complementary businesses, where cash-generative store brand private label offerings fuel investments for leading brands, including Opill , Mederma , Compeed , EllaOne , and Jungle Formula .

For more information, visit www.perrigo.com.

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