Perrigo Cuts Annual Guidance, This OTC Drug Firm Also Reports Mixed Q3 Earnings

Perrigo Company PLC PRGO reported third-quarter sales of $1.12 billion, up 2.2% Y/Y, missing the consensus of $1.20 billion, driven primarily by the acquisition of the Gateway infant formula facility and the U.S. and Canadian Good Start infant formula brand. 

The company reported adjusted EPS of $0.64 compared to $0.56 a year ago, beating the consensus of $0.61.

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Organic net sales decreased 1.2%, including -2.8 percentage points from purposeful SKU prioritization actions to enhance margins as part of the company's Supply Chain Reinvention Program and the HRA Pharma (HRA) distributor transitions.

Consumer Self-Care International (CSCI) net sales increased 11.2% compared to the prior year quarter to $420.3 million, and organic net sales increased 6.2%, including a -1.4 percentage points impact from the HRA distributor transition. 

Consumer Self-Care Americas (CSCA) net sales decreased 2.6% to $704 million, compared to the prior year's quarter, including -3.6 percentage points from purposeful SKU prioritization actions.

Guidance: Perrigo lowered guidance for net sales growth to 4.0%-6.0% Y/Y from 7.0%-11.0%, with organic net sales growth of 1.0%-3.0%, versus the previous range of 3.0%-6.0%.

The company revised FY23 adjusted EPS outlook to $2.50-$2.60, down from $2.50-$2.70 versus consensus $2.63.

"While we have updated our expectations for infant formula and the adverse impact from currency translation, the strength of our diversified portfolio, greater than originally anticipated margin expansion and a lower expected adjusted tax rate allows us to maintain the mid-to-lower end of our original 2023 EPS guidance range," said Patrick Lockwood-Taylor, president and CEO.

PRGO Price Action: Perrigo shares are up 5.06% at $29.91 on the last check Tuesday.

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