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Perrigo Q1 2025 Earnings Report
Perrigo reported strong first quarter 2025 adjusted EPS growth and margin expansion, driven by continuing infant formula business recovery.
Key Takeaways
Perrigo's first quarter 2025 results showed a slight decline in net sales but significant growth in adjusted EPS and operating income, primarily due to the recovery of the infant formula business and benefits from Project Energize. The company reaffirmed its full-year financial targets despite widening net sales target ranges due to macroeconomic uncertainty.
Net sales decreased 3.5% to $1.04 billion, primarily due to divested businesses, exited product lines, and currency translation.
Adjusted diluted EPS increased 106.9% to $0.60, driven by higher adjusted operating income and lower interest expense.
Adjusted gross margin expanded 440 basis points to 41.0%, mainly due to infant formula business recovery and the Supply Chain Reinvention program.
Organic net sales decreased 0.4%, with growth in Nutrition, Upper Respiratory, and Healthy Lifestyle categories offset by lost distribution of lower margin products and the lack of prior year benefit from Opill® stocking.
Perrigo
Perrigo
Perrigo Revenue by Segment
Revenue by Segment
Consumer Self-Care Americas Revenue
CapyFin.comConsumer Self-Care International Revenue
CapyFin.com Forward Guidance
Perrigo widened its fiscal year 2025 reported and organic net sales growth targets due to macroeconomic uncertainty but reaffirmed all other financial targets, including adjusted EPS.
Positive Outlook
- Reaffirming all other 2025 financial targets, including adjusted EPS range.
- Proactive scenario planning to mitigate macroeconomic impacts like tariffs.
- Plans to offset tariff impacts through strategic pricing actions, insourcing to U.S.-based manufacturing facilities, and other supply chain actions.
- Unique business model with 100+ molecules across 100% price point coverage and significant U.S.-based manufacturing provides an advantage.
- Perrigo's store brand and value brand offerings may benefit from shifting consumer behavior across the value spectrum.
Challenges Ahead
- Widening fiscal 2025 reported net sales growth target to 0% to 3% from 1% to 3% due to macroeconomic uncertainty.
- Widening fiscal 2025 organic net sales growth target to 1.5% to 4.5% from 2.5% to 4.5% due to macroeconomic uncertainty.
- Tariffs are expected to increase global cost of goods sold, primarily due to Oral Care in CSCA.
- Potential impact from pharmaceutical tariffs that may cover ingredients used in OTC products.
- Macroenvironment uncertainty and consumer behavior present new challenges.
Revenue & Expenses
Visualization of income flow from segment revenue to net income