Perrigo Company plc (NYSE: PRGO) recently reported its fourth-quarter 2023 financial results, with net sales of $1.16 billion, a slight increase of 0.1% year-over-year. While this figure was slightly below the consensus estimate of $1.18 billion, the company still managed to beat expectations with adjusted earnings per share (EPS) of $0.86, up 14.7% from the previous year.
Despite the marginal increase in net sales, Perrigo faced challenges in its Consumer Self-Care America segment, which saw a 2.8% decrease in net sales due to the impact of exited product lines. However, the Consumer Self-Care International segment experienced sales growth of 5.9%, driven by foreign currency translation and inorganic growth from the acquisition of Gateway.
Looking ahead, Perrigo is set to launch Project Energize, a three-year program aimed at enhancing its long-term business performance through the One Perrigo growth strategy. This initiative, expected to begin in the first quarter of 2024, will focus on increasing organizational agility and fortifying the infant formula business. The company anticipates annual pre-tax savings of $140 million to $170 million by 2026, with plans to reinvest $40 million to $60 million to support its blended-branded business model.
However, Perrigo also expects restructuring and associated charges of $140 million to $160 million, including investments of $20 million to $40 million by the end of 2026, which may lead to a net reduction of approximately 6% of total Perrigo roles.
In terms of guidance, Perrigo forecasts organic net sales growth of 1.0% to 3.0% for fiscal year 2024 compared to the prior year, with reported net sales expected to remain flat. The company also expects adjusted EPS of $2.50 to $2.65, falling short of the consensus estimate of $3.00.
Following the earnings release, PRGO shares were down 15.3% to $27.25. Investors will be closely watching Perrigo as it embarks on its Project Energize program and navigates the challenges and opportunities in the consumer healthcare market.
