DUBLIN, Nov. 8, 2022 /PRNewswire/ —
Key Financial Achievements of Perrigo Company:
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Perrigo recorded impressive third quarter net sales of $1.1 billion, marking a robust increase of 5.5%. Notably, this figure translates to an impressive 12.3% growth when excluding the effects of currency translation, compared to the same quarter last year. Furthermore, year-to-date net sales demonstrated an 8.7% increase, equating to a remarkable 14.0% rise once currency translation impacts are accounted for.
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The company’s organic(1) net sales saw a significant uptick of 7.7% in the third quarter and an 11.4% increase year-to-date, reflecting strong underlying demand compared to the previous year.
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Perrigo’s reported gross margin for the third quarter stood at 33.0%, with an adjusted gross margin of 36.5%. This figure represents a notable increase of 210 basis points compared to the same quarter last year, while remaining stable compared to the second quarter of 2022.
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During the quarter, Perrigo successfully gained market share across both business segments, indicating strong competitive positioning relative to the previous year.
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The reported operating income for the quarter was $33 million, down from $438 million reported in the prior year. Year-to-date, operating income amounted to $48 million, down from $364 million last year. This decrease primarily reflects the $418 million impact of the Omega arbitration award received in the previous year. However, adjusted operating income improved to $133 million, reflecting a 19.2% increase, or 32.2% growth when excluding currency translation effects. Year-to-date adjusted operating income was $336 million, reflecting a slight decline of 3.3%, or an increase of 5.9% when considering constant currency.
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In the third quarter, the reported net earnings (loss) per diluted share (“EPS”) registered a loss of ($0.39), compared to a loss of ($0.40) in the same period last year. Year-to-date EPS reflected a loss of ($0.88), compared to a loss of ($1.22) reported last year.
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The adjusted diluted EPS for the third quarter was $0.56, representing a growth of 24.4% compared to the previous year. Furthermore, the constant currency adjusted diluted EPS for the third quarter was noted at $0.65, showcasing a substantial increase of 44.4% from the prior year. Year-to-date adjusted diluted EPS was $1.32, compared to $1.45 from the prior year, while the constant currency adjusted diluted EPS stands at $1.50.
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Perrigo maintains its fiscal 2022 organic net sales growth outlook, reiterating a targeted range of 9.0%-10.0%, and a total net sales growth forecast of 8.5%-9.5% compared to the previous year.
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The company has adjusted its fiscal 2022 EPS range forecast to $2.00–$2.10, down from the previous range of $2.25–$2.35. This adjustment is attributed to anticipated declines in sales volumes in the CSCA segment and a $0.10 reduction due to worsening currency translation impacts, more than offsetting solid year-to-date performance in the international business and the acquisition benefits from the Gateway plant in the U.S. The company now expects a constant currency adjusted diluted EPS in the range of $2.25–$2.35.
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(1) |
Refer to the attached Appendix for comprehensive details. Organic net sales growth excludes the effects of acquisitions and divestitures as well as currency impacts. |
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(2) |
Adjustments related to non-GAAP figures are described in detail in the attached appendix, including adjusted profit measures such as adjusted EPS and adjusted operating income. These measures exclude certain costs from Q1 and Q2 2021 that were previously allocated to the RX business but are not considered representative of ongoing operational expenses. Further details are in the attached appendix. |
Perrigo Company plc (NYSE: PRGO) (“Perrigo” or the “Company”), a prominent provider of Consumer Self-Care Products, has announced its financial results for the third quarter ending October 1, 2022. All comparisons are made against the prior year fiscal third quarter unless otherwise stated.
President and CEO, Murray S. Kessler stated, “Perrigo’s third quarter performance was impressive, with significant growth in net sales, adjusted gross margin, adjusted operating income, and adjusted diluted EPS compared to the prior year, despite facing ongoing macroeconomic challenges. We successfully increased our market share globally, with gains across all segments, as store brands continue to outperform national brands. While revenue growth this quarter was solid, it fell short of our forecasts due to adverse currency translation effects, labor shortages impacting supply, and slower growth rates in certain categories.”
Kessler added, “Crucially, our business fundamentals remain robust. The labor situation has improved, and we recently announced a significant advancement in our Supply Chain Reinvention Program through our investment in infant formula. These initiatives, along with various margin enhancement strategies being implemented, including strategic pricing initiatives, are set to position Perrigo for exceptional growth in 2023.”
Kessler concluded, “Looking ahead, our primary focus is on execution. Successful integration of HRA, realization of HRA synergies, the integration of the Gateway plant, execution of supply chain strategies, and planned reduction of leverage will strategically position Perrigo for substantial growth in both top and bottom lines for years to come.”
Refer to Tables I – VI at the end of this press release for a detailed reconciliation of non-GAAP adjustments for the current year and prior year periods, along with additional non-GAAP information. The Company’s reported results are included in the attached Consolidated Statements of Operations, Balance Sheets, and Statements of Cash Flows.
Detailed Overview of Third Quarter 2022 Perrigo Results from Continuing Operations
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Net Sales |
Net Acquisitions |
Foreign Exchange |
Organic Net Sales |
|
|
CSCA |
4.0 % |
3.3 % |
— % |
7.3 % |
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CSCI |
8.4 % |
(20.3) % |
20.2 % |
8.3 % |
|
5.5 % |
(4.5) % |
6.7 % |
7.7 % |
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The reported net sales for Perrigo reflected a solid increase of 5.5%, with constant currency net sales rising by 12.3% and organic net sales increasing by 7.7%. The growth in reported net sales can be attributed to several key factors: 1) a contribution of $81 million in constant currency net sales resulting from the acquisition of HRA, 2) an additional $55 million contributed from strategic pricing actions implemented across both Consumer Self-Care segments, 3) significant store brand share gains in comparison to national brands and other store brand competitors, and 4) an increase of $25 million in sales of cough/cold-related products, which primarily influenced the Upper Respiratory category. This growth was also bolstered by the expansion in e-commerce and new product launches. However, this growth was partially counterbalanced by several challenges, including 1) a negative impact of $70 million due to unfavorable currency translation, 2) $31 million in losses from divested Latin American businesses and the ScarAway® brand, and 3) a decline in sales in certain categories, particularly within the CSCI Healthy Lifestyles segment.
For the third quarter, the reported operating income stood at $33 million, a significant drop from the $438 million reported for the prior year period. This decline primarily stems from the $418 million related to the Omega arbitration award received in the previous year. However, adjusted operating income showed growth, increasing by $21 million, or 19.2%, reaching $133 million. The constant currency adjusted operating income surged by 32.2% due to a combination of factors, including 1) higher gross profit flow-through resulting from strategic price increases, 2) elevated sales volumes, and 3) the addition of HRA to the portfolio, alongside the absence of two product recalls that occurred in the prior year. These gains were somewhat mitigated by a $36 million inflation impact, which included increased freight and distribution costs, along with higher operating expenses primarily driven by the HRA acquisition and losses from divested businesses.
The reported net loss amounted to $52 million or ($0.39) per diluted share, slightly improved from a reported net loss of $54 million or ($0.40) per diluted share from the prior year period. Excluding specific charges outlined in Table I, the adjusted net income for the third quarter of 2022 reached $76 million, equating to $0.56 per diluted share, compared to $61 million or $0.45 per diluted share from the prior year. The constant currency EPS for this quarter was noted at $0.65.
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(3) |
Cough/cold-related net sales encompass the cough/cold sub-category within Upper Respiratory, as well as the Pain and Sleep Aids categories. |
In-Depth Analysis of Third Quarter 2022 Business Segment Results from Continuing Operations
Performance Overview of Consumer Self-Care Americas Segment
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Third Quarter 2022 Net Sales Change Compared to Prior Year |
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Reported Net Sales |
Net Acquisitions |
Foreign Exchange |
Organic Net Sales |
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CSCA |
4.0 % |
3.3 %</ 
Sienna Blake
Sienna Blake is a licensed aesthetic consultant and beauty writer specializing in cosmetic surgery advancements and non-invasive treatments. With a background in dermatology and over eight years of industry experience, Sienna is passionate about helping people achieve confidence through informed beauty decisions. She holds a Bachelor's degree in Health Sciences and regularly collaborates with top plastic surgeons to stay at the forefront of aesthetic innovations. Outside of her work, Sienna enjoys traveling, skincare research, and practicing Pilates.
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