10-Q · May 6, 2026
Perrigo Company plc reported Q1 2026 results featuring a revenue of $969 million, missing expectations of $1.02 billion, while EPS was $0.43, beating estimates of $0.33. The overall performance challenges stem from…
Earnings analysis · 10-Q
PRGO earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Perrigo’s third quarter showed broad operating deterioration: revenue fell 5.2% year over year to $988.6 million, gross margin declined to 32.4%, and operating margin fell to 2.3% from 7.0%. Self Care, Specialty Care,…
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Perrigo’s third quarter showed broad operating deterioration: revenue fell 5.2% year over year to $988.6 million, gross margin declined to 32.4%, and operating margin fell to 2.3% from 7.0%. Self Care, Specialty Care, and Infant Formula all shrank, while All Other delivered improved profitability following the Dermacosmetics divestiture. Debt reduction and modestly improved nine-month operating cash flow were positives, but the $332.6 million goodwill impairment, continued Infant Formula weakness, and valuation sensitivity support a bearish assessment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
What stood out
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Operating cash flow improved
Nine-month operating cash flow increased to $65.2 million from $63.1 million, a $2.1 million improvement, primarily due to lower working capital. Investing cash flow was $323.4 million, driven largely by proceeds from the Dermacosmetics sale.
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Debt reduction strengthened liquidity
Debt was reduced materially: Term Loan B outstanding was $967.5 million at September 26, 2026 versus $1,394.3 million of Term A and Term B debt at December 31, 2025. The company also paid $335.0 million on the Revolving Facility during the second quarter.
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All Other margin expanded
All Other segment adjusted operating income increased 18.4% to $26.6 million, while adjusted operating margin expanded to 23.6% from 17.4%, supported by the absence of Dermacosmetics operating expenses and Oral Care innovation.
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Cost programs delivered savings
Management reported approximately $157 million of annualized Supply Chain Reinvention benefits achieved by the end of 2025 and approximately $167 million of annualized Project Energize savings, supporting the cost-reduction plan.
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Infant Formula divestiture agreed
Perrigo entered an agreement to sell Infant Formula for total consideration of up to $175 million, consisting of $40 million in cash at closing and up to $135 million contingent on milestones through 2030. Closing is expected in March 2027, subject to approvals.
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Tariff recovery supported gross profit
The company received approximately $28 million of tariff refunds during the quarter and recorded a further $4.5 million gross-profit benefit, leaving an estimated net tariff receivable of approximately $7 million.
What to watch
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Profitability deteriorated sharply
Third-quarter revenue declined 5.2% to $988.6 million, while gross margin fell to 32.4% from 36.1% and operating margin fell to 2.3% from 7.0%. Operating income declined 68.2% to $23.1 million.
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Goodwill impairment and re-test risk
Nine-month operating income became a $325.8 million loss versus $164.9 million of income in the prior-year period, primarily because of a $332.6 million goodwill impairment charge. The impairment included $77.4 million for Women’s Health, $66.3 million for Infant Formula, and $187.2 million for Oral Care.
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Infant Formula remains pressured
Infant Formula third-quarter revenue fell 9.6% to $80.7 million and segment adjusted operating income declined to a $0.5 million loss from $14.6 million of income. Planned under-absorption from lower production volumes remains a significant margin headwind.
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Cash and working capital declined
Cash and equivalents declined to $436.6 million from $531.6 million at December 31, 2025, while working capital declined to $956.3 million from $1,043.7 million. Nine-month financing cash flow was negative $477.7 million, including additional debt payments.
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Valuation remains highly sensitive
Management continues to identify sensitivity in goodwill valuations: Skin Health would indicate impairment with a 25-basis-point increase in the discount rate, while Women’s Health fair value equals carrying value and has a passing margin of less than 10%.
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Divestiture execution and earnout risk
The filing states there were no material changes to the risk factors in the 2025 Form 10-K. However, the Infant Formula sale includes up to $135 million of contingent consideration through 2030 and remains subject to third-party approvals before the expected March 2027 closing.
Management's outlook
The 10-Q does not provide new quantitative full-year guidance. The filing discusses expected program savings of $80 million to $100 million in gross pre-tax annual run-rate savings, with most expected in 2026, and approximately $21 million of Infant Formula capital expenditures through March 2027, but does not state a revised revenue or EPS outlook.
Earlier filings 4
10-K · February 26, 2026
Perrigo positions itself as a pure‑play self‑care company focused on store brands and a set of higher‑margin branded franchises, executing a ‘Three‑S’ plan to Stabilize, Streamline and Strengthen the business. The 10‑K…
10-Q · November 5, 2025
Perrigo reported net sales of $1,043.3 million for the three months ended September 27, 2025, down from $1,087.5 million a year ago, with gross profit of $377.1 million (gross margin ~36.1%) and operating income of…
10-Q · August 6, 2025
Perrigo reported quarterly net sales of $1,056.3 million (three months ended June 28, 2025) versus $1,065.5 million a year ago, and GAAP diluted EPS (loss) of $(0.06) versus $(0.79) in the prior-year quarter. Operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.