Perrigo Reports Third Quarter 2026 Financial Results From Continuing Operations
PERRIGO Co plc (PRGO) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 Perrigo Reports Third Quarter 2026 Financial Results From Continuing Operations • Execution of Three-S plan driving sequential improvement in operating results and market share gains across U.S. Store Brand OTC and key European brands • Infant Formula divestiture exp
How this was made
The 30-second read
Why it matters
The earnings shortfall and updated guidance are likely to trigger a sell‑off, though cost‑reduction programs may support a rebound.
Market read
The earnings miss directly impacts PRGO stock and may influence related consumer health stocks.
What to watch
Potential upside from cost‑saving initiatives and market‑share gains in U.S. store‑brand OTC may offset short‑term weakness.
Perrigo Reports Third Quarter 2026 Financial Results From Continuing Operations
Third-quarter sales, gross margin, operating margin and adjusted EPS declined year over year, while the Company lowered its fiscal 2026 outlook and cited measured retailer inventory positioning and continued softness in Europe.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| All In organic net sales growth YoY | (5.5)% to (1.5)% | (1.9)% | in line |
| Core organic net sales growth YoY | (3.0)% to 1.0% | (1.1)% | in line |
| All In adjusted gross margin | 36.5% to 37.5% | 36.3% | below |
| Core adjusted gross margin | 39.0% to 40.0% | 37.9% | below |
| All In adjusted operating margin | 12.5% to 13.5% | 13.1% | in line |
| Core adjusted operating margin | 15.0% to 16.0% | 14.3% | below |
| All In adjusted EPS | $2.00 to $2.30 | $0.60 | n/a |
| Core adjusted EPS | $2.25 to $2.55 | $0.61 | n/a |
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 reported net salesGAAP | $988.6M | – | (5.2)% |
| Q3 2026 All In organic net salesnon-GAAP | $993.9M | – | (1.9)% |
| Q3 2026 Core net salesnon-GAAP | $908.1M | – | (1.7)% |
| Q3 2026 Core organic net salesnon-GAAP | $913.1M | – | (1.1)% |
| Q3 2026 gross profitGAAP | $320.8M | – | – |
| Q3 2026 reported gross marginGAAP | 32.4% | – | (370)bps |
| Q3 2026 All In adjusted gross profitnon-GAAP | $358.5M | – | – |
| Q3 2026 All In adjusted gross marginnon-GAAP | 36.3% | – | (370)bps |
| Q3 2026 Core adjusted gross marginnon-GAAP | 37.9% | – | (140)bps |
| Q3 2026 operating incomeGAAP | $23.1M | – | – |
| Q3 2026 reported operating marginGAAP | 2.3% | – | (460)bps |
| Q3 2026 All In adjusted operating incomenon-GAAP | $129.1M | – | (25.5)% |
| Q3 2026 All In adjusted operating marginnon-GAAP | 13.1% | – | (360)bps |
| Q3 2026 Core adjusted operating incomenon-GAAP | $130.2M | – | – |
| Q3 2026 Core adjusted operating marginnon-GAAP | 14.3% | – | (210)bps |
| Q3 2026 income (loss) from continuing operationsGAAP | −$14.3M | – | – |
| Q3 2026 net income (loss)GAAP | −$27.5M | – | – |
| Q3 2026 diluted earnings (loss) per share from continuing operationsGAAP | $(0.10) | – | n/m |
| Q3 2026 diluted earnings (loss) per shareGAAP | $(0.20) | – | – |
| Q3 2026 All In adjusted diluted earnings per sharenon-GAAP | $0.60 | – | (25.0)% |
| Q3 2026 Core adjusted diluted earnings per sharenon-GAAP | $0.61 | – | (9.0)% |
| Q3 2026 reported effective tax rateGAAP | 21.1% | – | – |
| Q3 2026 adjusted effective tax ratenon-GAAP | 3.5% | – | – |
| Nine months 2026 net salesGAAP | $2.98B | – | – |
| Nine months 2026 gross profitGAAP | $960.2M | – | – |
| Nine months 2026 operating income (loss)GAAP | −$325.8M | – | – |
| Nine months 2026 income (loss) from continuing operationsGAAP | −$315.6M | – | – |
| Nine months 2026 net income (loss)GAAP | −$351.6M | – | – |
| Nine months 2026 diluted earnings (loss) per share from continuing operationsGAAP | $(2.27) | – | – |
| Nine months 2026 diluted earnings (loss) per shareGAAP | $(2.53) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Self CareLower consumption led to more measured retailer inventory positioning in Upper Respiratory and Pain & Sleep, while lower contract manufacturing volumes and pricing pressure were partly offset by Healthy Lifestyle and Digestive Health growth. | $612.7M | – | (3.2)% |
| Specialty CareWomen’s Health growth led by ellaOne and Opill was more than offset by lower store brand and contract manufactured Minoxidil sales and lower Mederma sales. | $182.4M | – | (4.6)% |
| Infant FormulaGrowth in store brand infant formula was more than offset by expected lower contract manufacturing volumes following the shift of certain contract formula shipments into the second quarter. | $80.7M | – | (9.6)% |
| All OtherThe decline was primarily due to the impact of divestitures. | $112.7M | – | (13.1)% |
Fiscal 2026 outlook
- RevenueAll In organic net sales growth YoY of (5.7)% to (4.6)%; Core organic net sales growth YoY of (3.8)% to (2.7)%
- Gross marginAll In adjusted gross margin of 37.8% to 38.8%; Core adjusted gross margin of 37.5% to 38.5%
- Tax rateAdjusted effective tax rate of approximately 14.0%
- NoteAll In adjusted operating margin of 14.3% to 15.3%; Core adjusted operating margin of 14.0% to 15.0%
- NoteAll In adjusted EPS of $2.25 to $2.45; Core adjusted EPS of $2.15 to $2.35
- NoteNet interest expense of approximately $162 million
- NoteAdjusted weighted average shares outstanding of approximately 140 million
- NoteNet leverage of approximately 4.0 times adjusted EBITDA
- NoteCash from operating activities as a percentage of adjusted net income in the low-to-mid-60% range
Capital returns
- The Company returned $40 million to shareholders through dividends in the third quarter.
- Cash dividends were $120.3 million for the nine months ended September 26, 2026.
What drove it
- Core net sales reflected lower consumption in Self Care, more measured retailer inventory positioning ahead of the cough and cold season in Upper Respiratory and Pain & Sleep, and lower contract manufacturing volumes.
- Pricing decreased 0.4% and volume/mix decreased 0.7%.
- Continued market share gains across U.S. Store Brand OTC and key European brands were supported by innovation and enhanced consumer marketing initiatives.
- Core adjusted gross margin was partly supported by the net recognition of a recovery of a portion of previously paid tariffs and continued market share gains.
- Benefits from the Operational Enhancement Program partly offset unfavorable gross-profit flow-through and higher advertising, promotional and variable employee compensation costs.
- All Other adjusted operating income benefited from tariff recovery, improved productivity and lower Oral Care operating expenses.
Concerns
- Reported net sales declined 5.2%, Core net sales declined 1.7%, and Core organic net sales declined 1.1%.
- Core adjusted gross margin declined 140 basis points to 37.9% on lower net sales volumes and unfavorable mix.
- Core adjusted operating margin declined 210 basis points to 14.3% due to unfavorable gross-profit flow-through and higher operating expenses.
- The Company cited continued softness in the European consumer environment.
- The Infant Formula divestiture is expected to result in an impairment loss between $275.0 million and $375.0 million during the fourth quarter of 2026.
- The strategic review of the Oral Care business remains ongoing.
What to watch
- Retailer inventory positioning and consumption trends in Upper Respiratory and Pain & Sleep ahead of the cough and cold season.
- Execution of the Infant Formula divestiture, including $40 million in upfront cash at closing and up to an additional $135 million contingent on net sales milestones through 2030.
- The fourth-quarter impairment loss expected from classifying Infant Formula as held for sale.
- The transition to reporting Infant Formula as discontinued operations beginning with fourth-quarter and full-year 2026 reporting.
- Progress toward fiscal 2026 Core organic net sales growth of (3.8)% to (2.7)% and Core adjusted operating margin of 14.0% to 15.0%.
- Market-share gains in U.S. Store Brand OTC and key European brands, and the outcome of the Oral Care strategic review.
Balance sheet and cash flow
- Net cash from operating activities was $96 million in the third quarter.
- Third quarter capital expenditures were $18 million.
- Net cash from operating activities was $65.2 million for the nine months ended September 26, 2026, compared to $63.1 million for the nine months ended September 27, 2025.
- Additions to property, plant and equipment were $(45.6) million for the nine months ended September 26, 2026, compared to $(66.6) million for the nine months ended September 27, 2025.
- Cash and cash equivalents as of September 26, 2026 were $437 million while total debt was $3.3 billion.
- Cash and cash equivalents were $436.6 million as of September 26, 2026, compared to $531.6 million as of December 31, 2025.
- Long-term debt, less current portion was $3,282.8 million and current indebtedness was $11.3 million as of September 26, 2026.
- Payments on long-term debt were $(761.8) million and borrowings of revolving credit agreements and other financing, net were $427.6 million for the nine months ended September 26, 2026.
Analysis
Perrigo reported weaker third-quarter results from continuing operations. Reported net sales were $988.6 million versus $1,043.3 million, while Core net sales were $908.1 million versus $923.5 million. Core organic net sales declined 1.1%, with lower Self Care consumption, more measured retailer inventory positioning in Upper Respiratory and Pain & Sleep, lower contract manufacturing volumes, a 0.4% decrease in pricing and a 0.7% decrease in volume/mix. Management highlighted continued share gains in U.S. Store Brand OTC and key European brands, but those gains did not offset the broader demand and inventory pressures.
Margins weakened materially. Reported gross margin was 32.4% versus 36.1%, All In adjusted gross margin was 36.3% versus 39.9%, and Core adjusted gross margin was 37.9% versus 39.4%. Lower sales volumes and unfavorable mix were the stated Core gross-margin headwinds, partly offset by a recovery of a portion of previously paid tariffs. Core adjusted operating margin declined to 14.3% from 16.5% as unfavorable gross-profit flow-through and higher advertising, promotional and variable employee compensation costs outweighed benefits from the Operational Enhancement Program.
Earnings also declined. Perrigo recorded a loss from continuing operations of $(14.3) million, compared with income from continuing operations of $12.7 million, and diluted EPS from continuing operations of $(0.10), compared with $0.09. Core adjusted diluted EPS was $0.61 versus $0.67, with the lower effective tax rate benefiting results by $0.10. All In adjusted diluted EPS was $0.60 versus $0.80, including approximately $0.12 of unfavorable EPS impact from planned under absorption within Infant Formula.
The portfolio is changing through the announced Infant Formula divestiture. The business generated $80.7 million of third-quarter net sales, down 9.6%, and segment adjusted operating income of $(1) million versus $15 million. Perrigo expects to receive total consideration of up to $175 million, consisting of $40 million in upfront cash at closing and up to $135 million contingent on net sales milestones through 2030. It also expects an impairment loss between $275.0 million and $375.0 million in the fourth quarter from held-for-sale measurement. Infant Formula will be reported as discontinued operations beginning with fourth-quarter and full-year 2026 reporting.
The updated fiscal 2026 guide reflects a more difficult outlook. Core organic net sales growth is now projected at (3.8)% to (2.7)%, Core adjusted gross margin at 37.5% to 38.5%, Core adjusted operating margin at 14.0% to 15.0%, and Core adjusted EPS at $2.15 to $2.35. The Company also guides to net leverage of approximately 4.0 times adjusted EBITDA. Third-quarter operating cash flow was $96 million, capital expenditures were $18 million, dividends were $40 million, and cash and cash equivalents were $437 million against total debt of $3.3 billion.
Management, verbatim
Our Three-S plan is delivering continued progress in the areas of the business within our control.
Albert Manzone, Interim President and Chief Executive Officer
The sale of Infant Formula is an important step in evolving Perrigo into a more focused consumer self-care company.
Albert Manzone, Interim President and Chief Executive Officer
We have adjusted our full-year outlook to reflect the divestiture, more measured retailer inventory positioning ahead of the cough and cold season, and continued softness in Europe.
Albert Manzone, Interim President and Chief Executive Officer
Not in the filing
stated, not guessed- Q3 2026 free cash flow
- Q3 2026 share repurchases
- Prior-quarter comparisons for reported financial metrics
- Fiscal 2026 operating-expense guidance
- A reported Q3 2026 total-debt comparison with a prior-year or prior-quarter period
- Actual fiscal 2026 results for comparison with the full-year adjusted EPS guidance
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Perrigo released its Q3 2026 earnings via an SEC Form 8‑K, highlighting operational challenges and a revised outlook.
Ticker impact
Perrigo disclosed Q3 2026 results with lower net sales, margins and EPS, and updated full-year outlook.
likely pressure as the market prices in weaker earnings and updated outlook
Revenue fell 5.2% YoY, operating margin dropped 460 bps, and EPS turned negative, prompting investors to reassess valuation.
Market effects
Consumer self‑care segment faces margin pressure, may affect peers in OTC and specialty care.
European market exposure could weigh on regional consumer staples stocks.
Limited to Perrigo and its immediate peers; no broad market shift expected.
Counterpoint
The divestiture of Infant Formula could improve long‑term margins, offering a buying opportunity if the stock overreacts.
Key entities
- CompanyPerrigo Company plc
Consumer self‑care products manufacturer reporting Q3 results.
