On May 6, 2026 Perrigo Company plc (NYSE: PRGO) ("Perrigo" or the "Company"), a leading provider of Consumer Self-Care Products, reported financial results from continuing operations for the first quarter ended March 28, 2026.
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"Our first quarter results reflect tangible progress as we continue to transform Perrigo into a more focused, disciplined, and consistent business," said President and CEO Patrick Lockwood-Taylor. "Despite a challenging operating environment, we are advancing a clear plan to address the factors within our control. Our Three‑S plan and shift to a category‑led operating model are strengthening execution and accountability, and the momentum we are seeing in areas such as U.S. Store Brand and Women’s Health are encouraging. We also continue to simplify and streamline the organization through disciplined portfolio actions, including the sale of our Dermacosmetics business, with proceeds expected to be used to support debt reduction.
"We are maintaining our full‑year guidance, supported by clear, quantifiable factors expected to drive improvement in the second half of the year. We recognize that the environment is dynamic, and we are monitoring potential impacts related to geopolitical developments in the Middle East and retailer inventory destocking. Against this backdrop, we are well-positioned to deliver on our 2026 outlook while building a foundation for long-term growth."
First Quarter Results
As announced last quarter, the Company now reports results on both an All In and Core Perrigo basis. All In results reflect the entirety of our business, while Core represents our go-forward business and excludes Infant Formula and previously announced divestitures.
All In
Core
1Q’26
1Q’25
Change
1Q’26
1Q’25
Change
Reported Net Sales
$969
$1,044
(7.2) %
$842
$918
(8.3) %
Reported Gross Margin
33.6 %
37.6 %
(400)bps
Reported Operating Margin
(38.4) %
4.5 %
n/m
Reported Diluted Earnings Per Share
("EPS")
$(2.81)
$0.00
n/m
All In
Core
1Q’26
1Q’25
Change
1Q’26
1Q’25
Change
Organic Net Sales(1)
$939
$1,042
(9.9) %
$817
$918
(11.0) %
Adj. Gross Margin
37.6 %
41.0 %
(340)bps
39.2 %
40.8 %
(160)bps
Adj. Operating Margin
11.6 %
14.0 %
(240)bps
12.8 %
13.9 %
(110)bps
Adj. Diluted EPS
$0.43
$0.60
(28.3) %
$0.40
$0.50
(20.0) %
(1) See attached Appendix for details. Change in net sales on an organic basis excludes the effects of acquisitions, divestitures and exited products, and the impact of currency.
(2) Share gains according to Circana 13-weeks ending 03/29/26 vs. prior year period in the categories where Perrigo participates in cough cold, allergy, digestive health, pain, nicotine replacement, skin care, and women’s health.
(3) All tables and data may not add due to rounding. Percentages are based on actuals.
Net Sales
Core net sales were $842 million, declining 8.3% year over year, while Core organic net sales decreased 11.0%. Core organic results primarily reflect lower consumption across both the U.S. and Europe. Reduced consumption was driven in part by lower seasonal incidence of cough and cold versus the prior year, which was an approximately 3.5% net sales headwind, and also led to lower retailer inventory levels, creating an additional net sales headwind of approximately 3.0%. These factors were partially offset by continued market share gains, supported by innovation launches and performance of Women’s Health products. Core organic net sales comprised net pricing of 0.2% and volume/mix of -11.0%.
All In reported net sales declined 7.2% year over year to $969 million. The decrease was driven by the same factors impacting Core net sales, partially offset by Infant Formula net sales growth.
Gross Margin
Reported gross margin was 33.6%, a decrease of 400 basis points versus the prior year due to the impact of prior-year manufacturing volume headwinds in Infant Formula and U.S. OTC, and lower net sales volumes, primarily within our Self Care reporting segment, partially offset by the net recognition of a recovery of a portion of previously paid tariffs of approximately $21 million.
Core adjusted gross margin decreased 160 basis points to 39.2% driven by lower net sales volumes, the carryover impact of prior-year manufacturing volume headwinds in U.S. OTC, and unfavorable mix. These factors were partially offset by the net recognition of a recovery of a portion of previously paid tariffs and favorable currency translation.
All In adjusted gross margin decreased 340 basis points to 37.6%, driven by the same factors impacting Core adjusted gross margin in addition to prior year manufacturing volume headwinds in Infant Formula.
Operating Margin
Reported operating margin was (38.4)% compared to 4.5% in the prior-year due to the $330.8 million goodwill impairment charge.
Core adjusted operating margin decreased 110 basis points to 12.8% primarily due to unfavorable gross margin. This decline was partially offset by reduced advertising and promotional expense, primarily from planned lower Opill investment levels, benefits from the Operational Enhancement Program, and favorable currency translation.
All In adjusted operating margin decreased 240 basis points to 11.6%, primarily driven by the same factors impacting Core adjusted operating margin in addition to the impact from Infant Formula.
Other Items
Reported net interest and other expense decreased $2.4 million to $36.2 million due to the hedging of expected proceeds in Euro from the Dermacosmetics business sale.
Net adjusted interest and other expense increased $5.0 million to $42.9 million due to lower interest income compared to prior year.
The Company’s reported effective tax rate was 4.6%. The Company’s adjusted effective tax rate decreased 790 basis points to 15.5%, primarily due to the release of reserves for uncertain tax positions in 2026.
Diluted EPS
Reported diluted EPS was $(2.81) due primarily to the $330.8 million goodwill impairment charge.
Core adjusted EPS declined 10 cents to $0.40, a 20.0% decrease from the prior year.
All In adjusted diluted EPS declined 17 cents to $0.43, a 28.3% decrease from the prior year.
Business Segment Results
1Q’26
1Q’25
Change
Organic
Change
Segment net sales:
Self Care
$543
$614
(11.5) %
(14.0) %
Specialty Care
207
199
4.0 %
(0.8) %
Infant Formula
90
88
2.1 %
1.9 %
Total segment net sales
840
901
(6.8) %
(9.5) %
All Other
129
143
(9.5) %
(11.8) %
Consolidated net sales
$969
$1,044
(7.2) %
(9.9) %
1Q’26
1Q’25
Change
Segment operating income:
Self Care
$68
$113
(39.3) %
Specialty Care
55
42
31.4 %
Infant Formula
(7)
11
n/m
Total segment operating income
$116
$165
(29.7) %
All Other
32
21
52.1 %
Unallocated
(35)
(40)
(11.2) %
Consolidated adjusted operating
income
$113
$147
(23.0) %
Self Care
Net sales decreased 11.5% compared to the prior year, inclusive of a 2.8% favorable impact of currency translation. The decline was driven by lower consumption in the U.S. and Europe, partly reflecting reduced seasonal incidence of cough and cold versus the prior year. This lower incidence pressured sales in the Upper Respiratory and Pain & Sleep categories, accounting for a significant portion of the segment’s net sales decline. The remaining decline reflected softer consumption in the Digestive Health and Healthy Lifestyles categories. Reduced consumption also led to lower retail inventory levels across the segment. These factors were partially offset by continued market share gains in the U.S. and Europe. Notably, Perrigo U.S. store brand OTC volume share2 increased 100 basis points.
Segment operating income decreased 39.3%, due primarily to the impact of prior-year manufacturing volume headwinds, lower net sales volumes, and unfavorable mix. These factors were partially offset by the net recognition of a recovery of a portion of previously paid tariffs in addition to favorable currency translation.
Specialty Care
Net sales increased 4.0%, inclusive of a 4.8% favorable effect of currency translation, driven by growth in the Women’s Health category, particularly continued momentum from Opill and ellaOne. This growth was partially offset by Skin Health results as lower store brand sales of Minoxidil at one customer were partially offset by share gains in Compeed and Jungle Formula.
Segment operating income increased 31.4% as lower advertising and promotional spend, including planned lower Opill investment levels, favorable currency translation, and the net recognition of a recovery of a portion of previously paid tariffs more than offset the impact of prior-year manufacturing volume headwinds and unfavorable mix.
Infant Formula
Net sales increased 2.1%, inclusive of a 0.3% favorable effect of currency translation, driven by growth in contract infant formula. This growth was partially offset by lower net sales in store brand and branded infant formula due to tougher prior‑year comparisons, including elevated sales from customer inventory replenishment.
Segment operating income decreased primarily due to unfavorable gross profit flow through from prior-year manufacturing volume headwinds, partly offset by lower operating expenses.
All Other
Net sales decreased 9.5%, inclusive of a 2.4% favorable effect of currency translation, driven in part by reduced distribution of lower-margin products.
Segment operating income increased 52.1% due to the net recognition of a recovery of a portion of previously paid tariffs, favorable mix in the Oral Care category, and lower operating expenses.
Cash Flow and Balance Sheet
First quarter 2026 cash for operating activities decreased $49 million to an outflow of $114 million due to lower earnings and higher working capital, in line with the Company’s expected full‑year cash flow phasing.
First quarter capital expenditures were $14 million and the Company returned $40 million to shareholders through dividends.
Cash and cash equivalents as of March 31, 2026, were $357 million while total debt was $3.6 billion.
After quarter end, the Company completed the sale of its Dermacosmetics business for total consideration of up to €332.6 million. The transaction consists of €305.6 million in upfront cash, including €5.6 million in net working capital adjustments, and up to an additional €27.0 million contingent on the achievement of net sales milestones over the next three years.
Fiscal 2026 Outlook
The Company reaffirms its 2026 outlook. Second-half results are expected to benefit from previously stated growth initiatives, the Operational Enhancement Program, and lapping of prior-year category consumption and manufacturing volume headwinds. As indicated last quarter, prior-year manufacturing volume headwinds are expected to result in an unfavorable All In EPS impact of approximately $0.60 in 2026. The Company experienced roughly $0.26 of that impact in the first quarter. The Company continues to closely monitor potential impacts from geopolitical developments in the Middle East. The Company is also monitoring retailer inventory levels and expects stabilization as consumption trends improve.
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All In
Ex Infant
Formula
Ex
Divestitures
Core
Foreign
Currency
Organic
Core
Net Sales Growth
(5.5)% to (1.5)%
—
~270 bps
(3.0)% to +1.0%
(0.5) %
(3.5)% to +0.5%
Adj. Gross Margin
36.5% to 37.5%
~240 bps
~(10) bps
39.0% to 40.0%
Adj. Operating Margin
12.5% to 13.5%
~260 bps
~(10) bps
15.0% to 16.0%
Adj. EPS
$2.00 to $2.30
~$0.30
~$(0.05)
$2.25 to $2.55
Other assumptions
Net interest expense of approximately $156 million.
Adjusted effective tax rate of approximately 20.0%.
Adjusted weighted average shares outstanding of approximately 140.5 million.
Net leverage of, or slightly lower than, approximately 4.0 times adjusted EBITDA.
Cash from operating activities as a percentage of adjusted net income in the mid-60% range.
Webcast and Conference Call Information
Perrigo previously announced that management will host a call/webcast to discuss its first quarter 2026 financial results beginning at 08:30 A.M. (EST) Wednesday, May 6, 2026. The call will be available live via webcast to interested parties in the investor relations section of the Perrigo website at View Source or by phone at 800-836-8184, International 646-357-8785, and reference ID # 82404. A taped replay of the call will be available beginning at approximately 12:00 P.M. (EST) Wednesday, May 6, until midnight Wednesday, May 13, 2026. To listen to the replay, dial 888-660-6345, International 646-517-4150, and use access code 82404#.
(Press release, Perrigo Company, MAY 6, 2026, View Source [SID1234665193])