Perrigo Cuts 2026 Core Outlook After Agreeing to Sell Infant Formula

The Tip Desk · November 11, 2026 · 4 min read

Third-quarter 2026 Core net sales were $908 million, down 1.7% year-over-year, as the company agreed to sell Infant Formula for up to $175 million.

Perrigo Company plc (PRGO), a provider of consumer self-care products, reported third-quarter continuing-operations net sales of $989 million, down 5.2% from a year earlier, and cut its fiscal 2026 Core outlook after agreeing to sell its Infant Formula business.

Core net sales, which exclude Infant Formula and previously announced divestitures, were $908 million, down 1.7% year-over-year. Core organic net sales decreased 1.1%. The company said results reflected lower consumption in Self Care, which led to more measured retailer inventory positioning ahead of the cough and cold season in Upper Respiratory and Pain & Sleep, and lower contract manufacturing volumes. Pricing decreased 0.4% and volume/mix decreased 0.7%.

Interim President and Chief Executive Officer Albert Manzone said the Three-S plan was delivering progress in areas within the company’s control, including market-share gains in U.S. store-brand OTC and key European brands, and that category trends improved sequentially. Those share gains, he said, combined with disciplined cost management, helped offset a difficult consumer backdrop.

Core adjusted gross margin decreased 140 basis points to 37.9%, which the company attributed to lower net sales volumes and unfavorable mix, partially offset by a recovery of a portion of previously paid tariffs and continued share gains. Core adjusted operating margin decreased 210 basis points to 14.3% on unfavorable gross-profit flow-through and higher operating expenses, primarily increased advertising and promotional investments and the normalization of variable employee compensation, partly offset by Operational Enhancement Program benefits. Core adjusted diluted EPS declined $0.06 to $0.61, a 9.0% decrease. A lower adjusted effective tax rate of 3.5% benefited results by $0.10.

Self Care net sales decreased 3.2% to $613 million, with organic sales down 2.8%. Segment adjusted operating income decreased 19.4% to $105 million. The company said Healthy Lifestyle and Digestive Health offset some of the Upper Respiratory and Pain & Sleep weakness. Specialty Care net sales decreased 4.6% to $182 million; segment adjusted operating income decreased 24.2% to $32 million. Infant Formula net sales decreased 9.6% to $81 million. All Other net sales decreased 13.1% to $113 million, primarily due to divestitures, while All Other adjusted operating income increased 18.4% to $27 million on a tariff recovery and lower Oral Care expenses. Consolidated adjusted operating income decreased 25.5% to $129 million.

Reported diluted EPS was $(0.10), compared with $0.09 a year earlier. Reported operating margin was 2.3%. All In adjusted diluted EPS declined $0.20 to $0.60, a 25.0% decrease, including about $0.12 of unfavorable EPS impact from planned under absorption in Infant Formula.

Subsequent to quarter-end, Perrigo announced an agreement to divest Infant Formula for total consideration of up to $175 million, consisting of $40 million in upfront cash and up to $135 million contingent on net-sales milestones through 2030. The company said it expects to recognize an impairment loss of $275.0 million to $375.0 million in the fourth quarter of 2026 as the business is measured as held for sale. Beginning with fourth-quarter and full-year 2026 reporting, Infant Formula will be reported as discontinued operations.

For fiscal 2026, the company updated its Core outlook to net sales growth of (3.6)% to (2.5)%, organic growth of (3.8)% to (2.7)%, adjusted gross margin of 37.5% to 38.5%, adjusted operating margin of 14.0% to 15.0%, and adjusted EPS of $2.15 to $2.35, from prior Core guidance of (3.0)% to 1.0% sales growth, 39.0% to 40.0% gross margin, 15.0% to 16.0% operating margin, and $2.25 to $2.55 EPS. All In guidance, excluding Infant Formula but continuing to include other divested businesses, is now net sales growth of (5.7)% to (4.6)%, adjusted gross margin of 37.8% to 38.8%, adjusted operating margin of 14.3% to 15.3%, and adjusted EPS of $2.25 to $2.45. The company said the updates reflect the Infant Formula divestiture, more measured retailer inventory positioning ahead of the cough and cold season, and continued softness in Europe. Other assumptions include net interest expense of approximately $162 million, an adjusted effective tax rate of approximately 14.0%, and net leverage of approximately 4.0 times adjusted EBITDA.

Cash and cash equivalents were $437 million as of September 26, 2026, and total debt was $3.3 billion. Third-quarter operating cash flow was $96 million.