Perrigo — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net sales for the quarter ended September 26, 2026, were $989 million, a 5.2% decrease year-over-year from $1,043 million.
• Core net sales were $908 million, a 1.7% decrease year-over-year, while Core organic net sales declined 1.1%.
• Reported gross margin was 32.4%, a decrease of 370 basis points year-over-year; Core adjusted gross margin was 37.9%, a decrease of 140 basis points.
• Reported operating margin was 2.3%, a decrease of 460 basis points year-over-year; Core adjusted operating margin was 14.3%, a decrease of 210 basis points.
• Reported diluted earnings per share (EPS) was $(0.10), compared to $0.09 in the prior year.
• Core adjusted diluted EPS was $0.61, a 9.0% decrease from $0.67 in the prior year; All In adjusted diluted EPS was $0.60, a 25.0% decrease.
• Net cash from operating activities was $96 million for the quarter.
• Cash and cash equivalents were $437 million as of September 26, 2026, with total debt of $3.3 billion.
• Third quarter capital expenditures were $18 million.

Guidance and Future Outlook:

• Updated full-year 2026 All In outlook for net sales growth to a decline of 5.7% to 4.6% (previously -5.5% to -1.5%).
• Updated full-year 2026 All In adjusted operating margin outlook to 14.3% to 15.3% (previously 12.5% to 13.5%).
• Updated full-year 2026 All In adjusted EPS outlook to $2.25 to $2.45 (previously $2.00 to $2.30).
• Updated full-year 2026 Core outlook for net sales growth to a decline of 3.6% to 2.5% (previously -3.0% to 1.0%).
• Updated full-year 2026 Core adjusted operating margin outlook to 14.0% to 15.0% (previously 15.0% to 16.0%).
• Updated full-year 2026 Core adjusted EPS outlook to $2.15 to $2.35 (previously $2.25 to $2.55).
• Outlook reflects the divestiture of Infant Formula, more measured retailer inventory positioning ahead of the cough and cold season, and continued softness in the European consumer environment.
• Net interest expense is expected to be approximately $162 million for the full year.
• Adjusted effective tax rate is expected to be approximately 14.0% for the full year.
• Net leverage is expected to be approximately 4.0 times adjusted EBITDA.

Business Segments and Product Lines:

• Self Care: Net sales were $613 million, down 3.2% year-over-year. Performance was impacted by lower consumption and measured retailer inventory positioning in Upper Respiratory and Pain & Sleep categories, partially offset by growth in Healthy Lifestyle (nicotine replacement) and Digestive Health (laxatives).
• Specialty Care: Net sales were $182 million, down 4.6% year-over-year. Women's Health showed strong growth led by ellaOne® and Opill®, while Skin Health was impacted by lower sales of store brand Minoxidil and Mederma® despite strong performance from Compeed® and Jungle Formula®.
• Infant Formula: Net sales were $81 million, down 9.6% year-over-year, driven by lower contract manufacturing volumes. Segment adjusted operating income was $(1) million, down from $15 million, impacted by planned under absorption.
• All Other: Net sales were $113 million, down 13.1% year-over-year, primarily due to divestitures. Segment adjusted operating income increased 18.4% to $27 million, driven by tariff recoveries and improved productivity in Oral Care.
• The Company is executing a "Three-S" plan to drive sequential improvement in operating results and market share gains.
• A strategic review of the Oral Care business remains ongoing.

Market and Competitive Landscape:

• The Company gained market share in U.S. store brand OTC and key European brands.
• Category trends improved sequentially, though the consumer backdrop remained difficult.
• Pricing decreased 0.4% and volume/mix decreased 0.7% for Core net sales.
• The Company faces continued softness in the European consumer environment.

Risks and Challenges:

• The Company expects to recognize an impairment loss between $275.0 million and $375.0 million in the fourth quarter of 2026 related to the measurement of the Infant Formula business as held for sale.
• The divestiture of Infant Formula is expected to result in a material reduction in expected future capital expenditures but includes a significant near-term impairment charge.
• Operating margins were pressured by unfavorable gross profit flow through, unfavorable mix, higher advertising and promotional investments, and the normalization of variable employee compensation.
• The Company faces risks related to supply chain impacts, trade relations, tariffs, and currency exchange rate fluctuations.

Management Commentary and Tone:

• Albert Manzone, Interim President and CEO, stated the "Three-S" plan is delivering continued progress in areas within the Company's control.
• Management views the sale of Infant Formula as an important step to evolve Perrigo into a more focused consumer self-care company, enhancing the margin profile and supporting deleveraging.
• Management expressed confidence that the underlying model combining scaled brands and store brands remains unchanged and is positioning the Company for consistent and profitable growth over the long term.

Other Key Points:

• The Company announced an agreement to divest its Infant Formula business for total consideration of up to $175 million ($40 million upfront cash and up to $135 million contingent on net sales milestones through 2030).
• Net proceeds from the Infant Formula divestiture are expected to be deployed in accordance with capital allocation priorities.
• The Company returned $40 million to shareholders through dividends in the third quarter.
• The Company reported a reported effective tax rate of 21.1% and an adjusted effective tax rate of 3.5% for the quarter.
• Infant Formula results will be reported as discontinued operations beginning with the fourth quarter and full-year 2026 reporting.
• A webcast and conference call to discuss results was held on November 4, 2026.