Perrigo Company (PRGO) investor relations material

Executive summary

• First quarter 2026 results were impacted by challenging market conditions, including softer cough and cold demand, retailer inventory destocking, and lower consumption in the U.S. and Europe, but market share gains were achieved in key categories and segments, especially U.S. store brand OTC and Women's Health.

• The Three-S plan and Operational Enhancement Program are driving operational improvements, cost savings, and portfolio focus, positioning the company for long-term growth.

• A $330.8 million goodwill impairment charge led to an operating loss and net loss for the quarter.

• Completed the sale of the Dermacosmetics business for up to €332.6 million, with proceeds earmarked for debt reduction.

• Full-year 2026 outlook is reaffirmed, with improvement expected in the second half as headwinds ease and growth initiatives take effect.

Financial highlights

• Q1 2026 consolidated net sales declined 7.2% year-over-year to $969 million; core net sales down 8.3% to $918 million.

• Adjusted core EPS was $0.40, with all-in adjusted EPS at $0.43, both above expectations due to tariff recovery and a lower tax rate.

• Reported gross margin decreased 400 bps to 33.6%; core adjusted gross margin fell 160 bps to 39.2%.

• First quarter cash from operating activities was an outflow of $114 million; cash and cash equivalents at quarter end were $357 million.

• Dividends paid totaled $40 million; capital expenditures were $14 million.

Outlook and guidance

• Full-year 2026 guidance reaffirmed, with 65%-70% of core adjusted EPS expected in the second half; adjusted EPS guidance: $2.25 to $2.55 (Core), $2.00 to $2.30 (All In).

• Net sales growth expected between -5.5% and -1.5% (All In), and -3.0% to +1.0% (Core); adjusted gross margin guidance: 36.5% to 37.5% (All In), 39.0% to 40.0% (Core).

• Key drivers for second-half improvement include consumer-centric innovation, distribution gains, demand generation, and operational enhancements.

• Operational Enhancement Program targets $80–$100 million in annual cost savings, with most savings realized in 2026.

• Guidance assumes benefits from cost savings, offset by higher A&P and incentive resets.