Perrigo Q4 Core EPS Drops to $0.76, Plans $80–100M Savings Program
In Q4, Perrigo’s core organic net sales dropped 2% and core EPS declined to $0.76, while full-year 2025 CORE EPS climbed 14% to $2.75. Management recorded a $1.3 billion non-cash goodwill impairment, forecast a $0.60 EPS under-absorption headwind for 2026, and initiated an $80–100 million annual savings program.
1. Q4 and Full-Year 2025 Performance
Perrigo’s core organic net sales fell 2% in Q4, with core operating income down $4 million and core EPS decreasing $0.02 to $0.76. For full-year 2025, all-in operating income grew 2% and EPS rose 7% to $2.75, while CORE operating income increased 7% and CORE EPS jumped 14%.
2. Goodwill Impairment and Financial Impact
Management recorded a $1.3 billion non-cash goodwill impairment in 2025 that does not affect cash flows but creates an approximate $0.60 EPS under-absorption headwind in 2026. CFO flagged potential additional impairment charges early in 2026 related to segment reporting changes.
3. Three-S Strategy and Portfolio Actions
Under its Three-S plan—simplify, streamline, strengthen—Perrigo gained over $100 million in new U.S. store-brand distribution and reversed years of market‐share declines in key OTC categories. The company is divesting its dermacosmetics business by Q2 2026, reviewing its infant formula portfolio, and reorganizing reporting into Self Care, Specialty Care, and infant formula segments.
4. 2026 Outlook and Savings Program
Management described 2026 as a transition year, guiding CORE net sales growth of -3.5% to +0.5% and CORE EPS of $2.25–$2.55. A two-year operational program targets $80–$100 million in annual pre-tax savings through ~7% workforce reductions and cost efficiencies, with most savings expected in the back half of the year.