Perrigo shares edge up on Q4 earnings, revenue beat

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DUBLIN - Perrigo Company plc (NYSE: NYSE:PRGO), a leading provider of Consumer Self-Care Products, announced its financial results for the fourth quarter ended December 31, 2023.

The company reported a slight beat on both earnings and revenue, with an adjusted EPS of $0.86, surpassing the analyst estimate of $0.83. Revenue for the quarter was reported at $1.2 billion, exceeding the consensus estimate of $1.18 billion.

For the fiscal year 2024, Perrigo provided guidance for an adjusted EPS range of $2.50 to $2.65, which is below the analyst consensus of $3.00. Despite this lower guidance, shares of Perrigo inched up by 0.09% following the earnings release, indicating a modestly positive market response to the company's quarterly performance.

Perrigo's fourth-quarter results showed a 0.1% growth in net sales compared to the same quarter last year, with organic net sales experiencing a slight decrease of 0.6%. This included a 2.4 percentage point impact from strategic SKU prioritization actions aimed at enhancing margins as part of the company's Supply Chain Reinvention Program.

The Consumer Self-Care International (CSCI) segment also saw a 5.9% increase in net sales compared to the prior year quarter, while the Consumer Self-Care Americas (CSCA) segment experienced a 2.8% decrease.

The company's GAAP gross margin for the fourth quarter improved by 380 basis points compared to the prior year quarter, while the adjusted gross margin saw a 140 basis points increase. The reported loss per share was -$0.20, compared to a loss of -$0.09 in the prior year quarter. The adjusted diluted EPS, however, increased by 14.7% to $0.86, up from $0.75 in the prior year quarter.

Patrick Lockwood-Taylor, President and CEO of Perrigo, commented on the company's progress, stating, "We exited 2023 with our international business firing on all cylinders and our U.S. OTC business performing well amid a normalizing consumer environment."

For the fiscal year 2023, Perrigo reported a 4.6% increase in net sales versus the prior year, with organic net sales up by 1.7%. The reported gross margin for the fiscal year improved by 340 basis points, and the adjusted gross margin expanded by 260 basis points.

The reported loss per share for the fiscal year was -$0.03, a significant improvement from the loss of -$0.97 in the prior year. The adjusted diluted EPS for the fiscal year increased by 24.6% to $2.58.

The company's outlook for fiscal 2024 includes organic net sales growth of 1.0% to 3.0% compared to the prior year, with reported net sales expected to be flat. The projected mid-teens adjusted diluted EPS growth, excluding infant formula, suggests that Perrigo is taking steps to augment and strengthen its infant formula business, which is anticipated to impact financial performance in 2024.

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