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• Infant Formula Net Sales: Increased by 19% year over year.

• Supply Chain Reinvention Benefits: Delivered an additional $8 million in benefits.

• Project Energize Savings: Achieved an additional $20 million in annual savings, bringing the total to $159 million.

• Organic Net Sales: Declined 0.4%, but excluding certain factors, grew 1.8% year over year.

• Gross Margin: Expanded by 440 basis points to 41%.

• Operating Margin: Expanded by 550 basis points.

• EPS Growth: Increased by 107% to $0.60 per share.

• Gross Profit: Grew 8.1% or 13.8% organically to $428 million.

• Operating Income: Grew almost 58% or 71% organically to $147 million.

• Cash on Balance Sheet: $410 million at the end of the first quarter.

• Net Sales Growth Expectations: Adjusted to between 0% and 3% for the quarter and 1.5% and 4.5% for organic growth.

• Tariff Impact on COGS: Expected 1% gross increase in 2025, rising to approximately 5.5% on a full-year basis.

• Adjusted EPS Target: Reaffirmed at $2.90 to $3.10 per share for 2025.

• Warning! GuruFocus has detected 5 Warning Signs with PRGO.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Perrigo Co PLC (NYSE:PRGO) reported a 19% increase in Infant Formula net sales compared to the same quarter last year, indicating a strong recovery in this segment.

• The company's Supply Chain Reinvention program delivered an additional $8 million in benefits, and Project Energize achieved $20 million in annual savings, reaching a total annual run rate of $159 million.

• Perrigo Co PLC (NYSE:PRGO) achieved a global service level of 94%, showcasing improvements in operational efficiency.

• The company's OTC brands experienced solid organic growth of 5.9% year over year, driven by strong sales of key products.

• Gross margin expanded by 440 basis points to 41%, and operating margin expanded by 550 basis points, reflecting improved profitability.

Negative Points

• Organic net sales declined by 0.4%, impacted by previously disclosed lost distribution of low-margin products in the US Store Brands segment.

• The uncertain macroeconomic environment, including inflation, tariffs, and reduced consumer confidence, poses challenges to sales growth.

• Perrigo Co PLC (NYSE:PRGO) expects a 1% gross increase in global cost of goods sold due to tariffs, with a full-year impact rising to approximately 5.5% of global COGS.

• The company has widened its 2025 net sales projections due to macroeconomic uncertainties, indicating potential volatility in revenue.

• Infant Formula sales recovery is tempered by increased marketing and promotions from domestic brands, which have temporarily reduced the price gap between National Brands and Store Brands.