Perrigo Company (PRGO) Q4 2025 earnings summary

Executive summary

• Achieved strong market share gains in U.S. and E.U. OTC and improved in-store execution despite overall market softness and infant formula headwinds, with FY2025 adjusted EPS at $2.75, up 7% year-over-year and in line with revised guidance.

• Advanced the Three-S plan (simplify/streamline/strengthen), including portfolio focus, operational efficiency, and assessment of Infant Formula and Oral Care businesses.

• Announced divestiture of Dermacosmetics business, expected to close in Q2 2026, with proceeds to reduce debt.

• Launched new operational enhancement programs targeting $80–100 million in annualized pre-tax savings and a 7% global workforce reduction.

• Transitioning to new reporting segments in 2026: Self Care, Specialty Care, and infant formula, aligning with the commercial operating model.

Financial highlights

• FY2025 net sales were $4.25 billion, down 2.8% year-over-year (organically down 2.4%); Q4 net sales were $1.11 billion, down 2.5% year-over-year.

• FY2025 adjusted operating income was $622 million, up 2.3% year-over-year; adjusted operating margin expanded to 14.6%.

• FY2025 adjusted EPS was $2.75 (up 7.0%); CORE adjusted EPS was $2.52 (up 14.0%).

• Operating cash flow for FY2025 was $239 million; year-end cash was $532 million; net leverage at 4.0x.

• GAAP results include a $1.3 billion goodwill impairment charge, with possible additional non-cash impairment up to $350 million in Q1 2026.

Outlook and guidance

• FY2026 is expected to be a transition year with temporary headwinds and market softness persisting in H1, but improvement anticipated in H2.

• FY2026 CORE organic net sales growth guidance: -3.5% to +0.5%; CORE EPS range: $2.25–$2.55.

• All-in net sales growth expected at -5.5% to -1.5%; all-in EPS range: $2.00–$2.30.

• CORE gross margin expected at 39–40%, operating margin at 15–16%; all-in gross margin at 36.5–37.5%, operating margin at 12.5–13.5%.

• Operating cash flow conversion expected in the mid-60% range; net leverage to remain flat or improve slightly.