Perrigo Company (PRGO) Q2 2026 earnings summary

Executive summary

• Leadership transition with a new interim CEO and board expansion, focused on value creation and operational execution.

• Continued execution of the Three-S plan (Stabilize, Streamline, Strengthen) led to improved business fundamentals, portfolio simplification, and market share gains in U.S. OTC and key European brands.

• Completed the divestiture of the Dermacosmetics business and ongoing strategic reviews of Infant Formula and Oral Care businesses.

• Despite category softness and macroeconomic headwinds, market share gains were achieved through innovation and commercial execution.

• Sequential improvement in category growth and consumption headwinds moderating, with H1 2026 performance in line with expectations and stronger H2 anticipated.

Financial highlights

• Q2 2026 Core Net Sales: $936M, down 3.1% year-over-year; All In Net Sales: $1,022.8M, down 3.2% year-over-year.

• Q2 2026 Core Adjusted EPS: $0.46 (down 20.7%); All In Adjusted EPS: $0.50; Reported diluted EPS: $0.53–$0.63, benefiting from the Dermacosmetics sale.

• Q2 2026 Core Adjusted Gross Margin: 37.0% (down 250bps); All In Adjusted Gross Margin: 35.6% (down 250bps); Reported All In gross margin: 30.7% (down 370bps).

• Operating cash flow for Q2: $83M; cash and cash equivalents at quarter-end: $400M; capital expenditures: $14M; dividends paid: $40M.

• Operating income for Q2 2026 was $23.5M, down 48.4% year-over-year, driven by lower gross profit and a $331.8M goodwill impairment charge.

Outlook and guidance

• Full-year 2026 outlook reaffirmed, expecting a sequentially stronger second half, with growth driven by innovation, distribution gains, and category normalization.

• FY2026 Core Net Sales guidance: (3.0)% to +1.0%; All In Net Sales: (5.5)% to (1.5)%; Core Adjusted EPS: $2.25–$2.55; All In Adjusted EPS: $2.00–$2.30.

• Net interest expense expected at ~$156M; adjusted effective tax rate ~18.0%; diluted shares outstanding updated to 139.3M.

• Planned under absorption from lower prior year sales volumes expected to impact EPS by $0.60 in 2026.

• Most restructuring and operational enhancement program benefits to be realized in 2026.