NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Information
Perrigo Company plc was incorporated under the laws of Ireland on June 28, 2013 and became the successor registrant of Perrigo Company, a Michigan corporation, on December 18, 2013 in connection with the acquisition of Elan Corporation, plc (“Elan”). Unless the context requires otherwise, the terms Perrigo, the “Company,” “we,” “our,” “us,” and similar pronouns used herein refer to Perrigo Company plc, its subsidiaries, and all predecessors of Perrigo Company plc and its subsidiaries.
Perrigo is a leading pure-play self-care company with more than a century of providing high-quality health and wellness solutions to meet the evolving needs of consumers. As one of the originators of the over-the-counter (“OTC”) self-care market, Perrigo is led by its vision “To Provide The Best Self-Care For Everyone” and its purpose to “Make Lives Better Through Trusted Health and Wellness Solutions, Accessible To All”.
Basis of Presentation
Our unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the unaudited Condensed Consolidated Financial Statements have been included and include our accounts and accounts of all majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Some amounts in this report may not add due to rounding.
Segment Reporting
Our segments reflect the way in which our chief operating decision maker (“CODM”), who is our Chief Executive Officer (“CEO”), makes operating decisions, allocates resources and manages the growth and profitability of the Company. Financial information related to our business segments and geographic locations can be found in Note 2 and Note 17.
In the first quarter of 2026, we completed the implementation of a new operating model intended to further enhance the execution of our strategy and prior period segment disclosures have been revised to reflect the new segments.
We now report results in the following three reporting segments:
•Self Care is comprised of our Upper Respiratory, Digestive Health, Pain & Sleep and Healthy Lifestyle product categories globally.
•Specialty Care is comprised of our Women's Health and Skin Health product categories globally.
•Infant Formula is comprised of the Infant Formula product category, which includes nutrition products designed to meet the dietary needs of infants.
Our Oral Care product category and Other product category, which includes our Dermacosmetics business, are together disclosed as “All Other.”
We previously had an Rx segment which was comprised of our generic prescription pharmaceuticals business in the U.S., and other pharmaceuticals and diagnostic business in Israel, which have been divested. Following the divestiture, there were no substantial assets or operations left in this segment. The Rx segment was reported as Discontinued Operations in 2021, and is presented as such for all periods in this report (refer to Note 4).
Perrigo Company plc - Item 1
Note 1
Foreign Currency Translation and Transactions
We translate our non-U.S. dollar-denominated operations’ assets and liabilities into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of Accumulated other comprehensive income (loss) (“AOCI”). Gains or losses from foreign currency transactions are included in Other (income) expense, net.
Allowance for Credit Losses
Expected credit losses on trade receivables and contract assets are measured collectively by geographic location. Historical credit loss experience provides the primary basis for estimation of expected credit losses and is adjusted for current conditions and for reasonable and supportable forecasts. Receivables that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. The following table presents the allowance for credit losses activity (in millions):
| | | | | | | | | | | | | | | |
| Three Months Ended | | |
| March 28, 2026 | | March 29, 2025 | | | | |
| Balance at beginning of period | $ | 6.5 | | | $ | 6.0 | | | | | |
| | | | | | | |
| Receivables written-off | (2.1) | | | (0.9) | | | | | |
| Recoveries collected | — | | | 0.1 | | | | | |
| | | | | | | |
| Currency translation adjustment | (0.1) | | | 0.2 | | | | | |
| Balance at end of period | $ | 4.3 | | | $ | 5.4 | | | | | |
NOTE 2 - REVENUE RECOGNITION
The following is a summary of our net sales by category (in millions):
| | | | | | | | | | | | | | | |
| Three Months Ended | | |
| March 28, 2026 | | March 29, 2025 | | | | |
| Self Care | | | | | | | |
| Upper Respiratory | $ | 197.4 | | | $ | 214.7 | | | | | |
| Digestive Health | 96.6 | | | 112.9 | | | | | |
| Healthy Lifestyle | 142.7 | | | 157.0 | | | | | |
| Pain & Sleep | 106.6 | | | 129.7 | | | | | |
Total Self Care | $ | 543.3 | | | $ | 614.3 | | | | | |
| | | | | | | |
Specialty Care | | | | | | | |
| Skin Health | $ | 151.9 | | | $ | 149.6 | | | | | |
| Women's Health | 55.1 | | | 49.5 | | | | | |
Total Specialty Care | $ | 207.0 | | | $ | 199.1 | | | | | |
| | | | | | | |
| Infant Formula | $ | 89.7 | | | $ | 87.8 | | | | | |
| | | | | | | |
All Other(1) | $ | 129.2 | | | $ | 142.7 | | | | | |
| Total net sales | $ | 969.2 | | | $ | 1,043.9 | | | | | |
(1) Consists primarily of Oral Care, Dermacosmetics Business and other miscellaneous or otherwise uncategorized product lines, none of which is greater than 10% of the segment net sales.
The following table provides information about contract assets from contracts with customers (in millions):
| | | | | | | | | | | | | | | | | |
| Balance Sheet Location | | March 28, 2026 | | December 31, 2025 |
| Short-term contract assets | Prepaid expenses and other current assets | | $ | 35.7 | | | $ | 37.3 | |
Perrigo Company plc - Item 1
Note 2
We generated net sales in the following geographic locations(1) (in millions):
| | | | | | | | | | | | | | | |
| Three Months Ended | | |
| March 28, 2026 | | March 29, 2025 | | | | |
| U.S. | $ | 554.4 | | | $ | 609.3 | | | | | |
Europe(2) | 391.4 | | | 412.3 | | | | | |
All other countries(3) | 23.4 | | | 22.3 | | | | | |
| Total net sales | $ | 969.2 | | | $ | 1,043.9 | | | | | |
(1) The net sales by geography are derived from the location of the entity that sells to a third party.
(2) Includes Ireland net sales of $4.1 million for the three months ended March 28, 2026, and $11.0 million for the three months ended March 29, 2025.
(3) Includes net sales generated primarily in Australia and Canada.
NOTE 3 - ASSETS HELD FOR SALE
We classify assets as “held for sale” when, among other factors, management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value and the fair market value, less costs to sell.
On July 13, 2025, we entered into a binding agreement to sell our Dermacosmetics branded business in Northern Europe, the Netherlands and Poland (the “Dermacosmetics Business”) to Kairos Bidco AB (“Kairos”) for total consideration of up to €327 million, consisting of an upfront cash payment of €300 million to be paid by Kairos at closing, subject to customary adjustments, and up to €27 million in potential earn-out payments based on the Dermacosmetics Business achieving certain performance thresholds. Following the closing of KKR’s acquisition of Karo Healthcare AB on August 27, 2025, Kairos has transferred the binding agreement to acquire the Dermacosmetics Business to Karo Healthcare AB.
As of December 31, 2025, the Dermacosmetics Business was classified as held for sale as the reporting criteria were met. The assets and liabilities associated with this business are not included in any of our reporting segments and therefore are reported in All Other.
As of the held for sale date and as of March 28, 2026, the estimated fair value less costs to sell of the Dermacosmetics Business exceeded its carrying value. As such, no impairment charge was recorded during the year ended December 31, 2025 or the three months ended March 28, 2026. The assets and liabilities held for sale related to the Dermacosmetics Business were reported within Current assets held for sale and Current liabilities held for sale on the Condensed Consolidated Balance Sheets. The assets and liabilities of the Dermacosmetics Business reported as held for sale as of March 28, 2026 totaled $264.6 million and $28.9 million, respectively.
On April 30, 2026, the sale of the Dermacosmetics Business was completed for total consideration of up to €332.6 million. The transaction consists of €305.6 million in upfront cash, including €5.6 million in net working capital adjustments, and up to an additional €27.0 million contingent on the achievement of net sales milestones over the next three years. Brands sold in the transaction include ACO, Biodermal, Emolium, and Iwostin.
Perrigo Company plc - Item 1
Note 3
The following table presents the assets and liabilities held for sale (in millions):
| | | | | | | | | | | | | | | |
| March 28, 2026 | | December 31, 2025 | | | | |
| Cash and cash equivalents | $ | 2.3 | | | $ | 2.3 | | | | | |
| Accounts receivable, net | 22.7 | | 23.6 | | | | |
| Inventories | 26.3 | | 29.0 | | | | |
| Goodwill and indefinite-lived intangible assets | 107.3 | | 108.6 | | | | |
| Definite-lived intangible assets, net | 96.5 | | 98.5 | | | | |
Other assets held for sale | 9.5 | | 10.6 | | | | |
| Total Assets Held for Sale | $ | 264.6 | | | $ | 272.6 | | | | | |
| | | | | | | |
| Accounts payable | $ | 3.9 | | | $ | 6.5 | | | | | |
| Other accrued liabilities | 1.5 | | 7.0 | | | | |
Income tax liabilities | 6.5 | | 7.4 | | | | |
Other liabilities held for sale | 17.1 | | 5.9 | | | | |
| Total Liabilities Held for Sale | $ | 28.9 | | | $ | 26.8 | | | | | |
NOTE 4 - DISCONTINUED OPERATIONS
Our discontinued operations primarily consist of our former Rx segment, which held our prescription pharmaceuticals business in the U.S. and our pharmaceuticals and diagnostic businesses in Israel (collectively, the “Rx business”).
In connection with the sale of the Rx business, Perrigo retained certain pre-closing liabilities arising out of antitrust (refer to Note 16 under the header “Price-Fixing Lawsuits”) and opioid matters and the Company’s Albuterol recall, subject to, in each case, Altaris Capital Partners, LLC (“Altaris”) obligation to indemnify the Company for fifty percent of these liabilities up to an aggregate cap on Altaris' obligation of $50.0 million. As of March 28, 2026, the loss accrual for litigation contingencies reflected on the Condensed Consolidated Balance Sheets in Other accrued liabilities included $43.0 million related to price-fixing lawsuits. A recovery receivable was recorded for fifty percent of this liability as of March 28, 2026 reflected on the Condensed Consolidated Balance Sheets in Prepaid expenses and other current assets.
Current and prior period reported net loss from discontinued operations primarily relates to the provision for litigation contingencies.
NOTE 5 - INVENTORIES
Major components of inventory were as follows (in millions):
| | | | | | | | | | | |
| March 28, 2026 | | December 31, 2025 |
| Finished goods | $ | 701.9 | | | $ | 685.6 | |
| Work in process | 228.7 | | | 259.4 | |
| Raw materials | 190.8 | | | 204.0 | |
| Total inventories | $ | 1,121.4 | | | $ | 1,149.0 | |
Perrigo Company plc - Item 1
Note 6
NOTE 6 - INVESTMENTS
The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions):
| | | | | | | | | | | | | | | | | | | | |
| Measurement Category | | Balance Sheet Location | | March 28, 2026 | | December 31, 2025 |
| | | | | | |
Fair value method(1) | | Other non-current assets | | $ | 0.9 | | | $ | 0.9 | |
| Equity method | | Other non-current assets | | $ | 23.5 | | | $ | 23.4 | |
(1) Measured using the Net Asset Value practical expedient.
The following table summarizes the (income) loss recognized in earnings of our equity securities (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | |
| Measurement Category | | Income Statement Location | | March 28,
2026 | | March 29,
2025 | | | | |
| Fair value method | | Other operating expense, net | | $ | — | | | $ | (0.1) | | | | | |
| Equity method | | Other operating expense, net | | $ | (0.1) | | | $ | 0.1 | | | | | |
NOTE 7 - LEASES
The balance sheet locations of our lease assets and liabilities were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | |
| Assets | | Balance Sheet Location | | March 28, 2026 | | December 31, 2025 |
| Operating | | Operating lease assets | | $ | 162.3 | | | $ | 167.8 | |
| Finance | | Other non-current assets | | 10.6 | | | 11.5 | |
| Total | | | | $ | 172.9 | | | $ | 179.3 | |
| | | | | | | | | | | | | | | | | | | | |
| Liabilities | | Balance Sheet Location | | March 28, 2026 | | December 31, 2025 |
| Current | | | | | | |
| Operating | | Other accrued liabilities | | $ | 26.1 | | | $ | 25.7 | |
| Finance | | Current indebtedness | | 1.6 | | | 1.8 | |
| Non-Current | | | | | | |
| Operating | | Other non-current liabilities | | 146.7 | | | 151.5 | |
| Finance | | Long-term debt, less current portion | | 10.8 | | | 11.5 | |
| Total | | | | $ | 185.2 | | | $ | 190.5 | |
Expenses related to leases were as follows (in millions):
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 28, 2026 | | March 29, 2025 | | | | |
Operating leases(1) | | $ | 10.3 | | | $ | 11.8 | | | | | |
| | | | | | | | |
| Finance leases | | | | | | | | |
| Amortization | | $ | 0.5 | | | $ | 0.5 | | | | | |
| Interest | | 0.1 | | | 0.1 | | | | | |
| Total finance leases | | $ | 0.6 | | | $ | 0.6 | | | | | |
(1) Includes short-term leases and variable lease costs, which are immaterial.
Perrigo Company plc - Item 1
Note 7
The annual future maturities of our leases as of March 28, 2026 are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | |
| | Operating Leases | | Finance Leases | | Total |
| 2026 | | $ | 24.9 | | | $ | 1.5 | | | $ | 26.5 | |
| 2027 | | 30.6 | | | 1.8 | | | 32.4 | |
| 2028 | | 24.8 | | | 1.8 | | | 26.6 | |
| 2029 | | 20.8 | | | 1.7 | | | 22.4 | |
| 2030 | | 15.7 | | | 1.6 | | | 17.3 | |
After 2030 | | 85.3 | | | 5.8 | | | 91.1 | |
| Total lease payments | | $ | 202.1 | | | $ | 14.2 | | | $ | 216.3 | |
| Less: Interest | | 29.3 | | | 1.8 | | | 31.1 | |
| Present value of lease liabilities | | $ | 172.8 | | | $ | 12.4 | | | $ | 185.2 | |
Our weighted average lease terms and discount rates are as follows:
| | | | | | | | | | | | | | |
| | March 28, 2026 | | March 29, 2025 |
| Weighted-average remaining lease term (in years) | | | | |
| Operating leases | | 8.89 | | 9.38 |
| Finance leases | | 7.78 | | 8.89 |
| Weighted-average discount rate | | | | |
| Operating leases | | 4.0 | % | | 3.9 | % |
| Finance leases | | 3.5 | % | | 3.4 | % |
Our lease cash flow classifications are as follows (in millions):
| | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 28, 2026 | | March 29, 2025 |
| Cash paid for amounts included in the measurement of lease liabilities | | | | |
| Operating cash flows for operating leases | | $ | 8.4 | | | $ | 9.2 | |
| Operating cash flows for finance leases | | $ | 0.1 | | | $ | 0.1 | |
| Financing cash flows for finance leases | | $ | 0.5 | | | $ | 0.5 | |
| | | | |
| Leased assets used in exchange for new finance lease liabilities | | $ | (0.4) | | | $ | — | |
| Leased assets obtained in exchange for new operating lease liabilities | | $ | 2.0 | | | $ | 0.6 | |
NOTE 8 - GOODWILL AND INTANGIBLE ASSETS
Goodwill
Changes in the carrying amount of goodwill, by reporting segment, were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 | | | | | | | | Impairments | | | | Currency translation adjustments | | March 28, 2026 |
Self Care | | $ | 1,113.9 | | | | | | | | | $ | — | | | | | $ | (9.4) | | | $ | 1,104.6 | |
Specialty Care | | 682.8 | | | | | | | | | (77.4) | | | | | (8.1) | | | 597.3 | |
| Infant Formula | | 66.3 | | | | | | | | | (66.3) | | | | | — | | | — | |
All Other | | 187.2 | | | | | | | | | (187.2) | | | | | — | | | — | |
| Total goodwill | | $ | 2,050.1 | | | | | | | | | $ | (330.8) | | | | | $ | (17.5) | | | $ | 1,701.8 | |
Perrigo Company plc - Item 1
Note 8
Reporting Unit Goodwill
Women’s Health, Infant Formula, and Oral Care Reporting Units
During the three months ended March 28, 2026, we changed our reporting segments to align with organizational structure changes intended to further enhance the execution of our strategic priorities. As a result of the change, we prepared a quantitative goodwill impairment test under the previous and newly established reporting units. We determined the carrying value of the Women’s Health, Infant Formula, and Oral Care reporting units exceeded their respective fair values. We recorded goodwill impairment charges of $77.4 million, $66.3 million, and $187.2 million in Women’s Health, Infant Formula, and Oral Care reporting units, respectively. This resulted in $107.1 million remaining goodwill in the Women’s Health reporting unit, which is reported within the Specialty Care segment. The goodwill related to Infant Formula and Oral Care reporting units are fully impaired, and the respective goodwill balances for these reporting units have been reduced to zero.
Intangible Assets
Intangible assets and related accumulated amortization consisted of the following(1) (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 28, 2026 | | December 31, 2025 | | |
| | Gross | | Accumulated
Amortization | | Gross | | Accumulated
Amortization | | | | |
Indefinite-lived intangibles: | | | | | | | | | | | |
| Trademarks, trade names, and brands | $ | 3.5 | | | $ | — | | | $ | 3.5 | | | $ | — | | | | | |
| In-process research and development | 1.1 | | | — | | | 1.1 | | | — | | | | | |
| Total indefinite-lived intangibles | $ | 4.6 | | | $ | — | | | $ | 4.6 | | | $ | — | | | | | |
Definite-lived intangibles: | | | | | | | | | | | |
| Distribution and license agreements and supply agreements | $ | 99.6 | | | $ | 62.5 | | | $ | 109.5 | | | $ | 70.1 | | | | | |
| Developed product technology, formulations, and product rights | 346.3 | | | 247.5 | | | 351.9 | | | 247.9 | | | | | |
| Customer relationships and distribution networks | 1,765.8 | | | 1,203.4 | | | 1,845.5 | | | 1,257.2 | | | | | |
| Trademarks, trade names, and brands | 2,362.1 | | | 801.3 | | | 2,446.3 | | | 826.5 | | | | | |
| Non-compete agreements | — | | | — | | | 2.1 | | | 2.1 | | | | | |
| Total definite-lived intangibles | $ | 4,573.9 | | | $ | 2,314.6 | | | $ | 4,755.3 | | | $ | 2,403.8 | | | | | |
| Total intangible assets | $ | 4,578.5 | | | $ | 2,314.6 | | | $ | 4,759.9 | | | $ | 2,403.8 | | | | | |
(1) Certain intangible assets are denominated in currencies other than U.S. dollar; therefore, their gross and net carrying values are subject to foreign currency movements.
We recorded amortization expense of $54.5 million and $54.8 million for the three months ended March 28, 2026 and March 29, 2025, respectively.
Perrigo Company plc - Item 1
Note 9
NOTE 9 - FAIR VALUE MEASUREMENTS
The table below summarizes the valuation of our financial instruments carried at fair value by the applicable pricing categories (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 28, 2026 | | December 31, 2025 |
| Measured at fair value on a recurring basis: | | Level 1 | | Level 2 | | Level 3 | | Level 1 | | Level 2 | | Level 3 |
| Assets: | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Foreign currency forward contracts | | $ | — | | | $ | 5.6 | | | $ | — | | | $ | — | | | $ | 2.4 | | | $ | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Interest rate swap agreements | | — | | | 2.8 | | | — | | | — | | | 1.1 | | | — | |
| | | | | | | | | | | | |
| Total assets | | $ | — | | | $ | 8.4 | | | $ | — | | | $ | — | | | $ | 3.5 | | | $ | — | |
| | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | |
| Foreign currency forward contracts | | $ | — | | | $ | 4.8 | | | $ | — | | | $ | — | | | $ | 14.5 | | | $ | — | |
| Cross-currency swaps | | — | | | 211.1 | | | — | | | — | | | 265.6 | | | — | |
| | | | | | | | | | | | |
| Interest rate swap agreements | | — | | | 23.4 | | | — | | | — | | | 32.8 | | | — | |
| Total liabilities | | $ | — | | | $ | 239.3 | | | $ | — | | | $ | — | | | $ | 312.9 | | | $ | — | |
| | | | | | | | | | | | |
| Measured at fair value on a non-recurring basis: | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | |
| | | | | | | | | | | | |
Goodwill(1) | | $ | — | | | $ | — | | | $ | 107.1 | | | $ | — | | | $ | — | | | $ | 2,050.1 | |
| | | | | | | | | | | | |
Definite-lived intangible assets | | — | | | — | | | — | | | — | | | — | | | 5.5 | |
Equity method investments | | — | | | — | | | — | | | — | | | — | | | 3.5 | |
| | | | | | | | | | | | |
| Total assets | | $ | — | | | $ | — | | | $ | 107.1 | | | $ | — | | | $ | — | | | $ | 2,059.1 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
(1) During the three months ended March 28, 2026, we assessed the fair value of our Women’s Health, Infant Formula, and Oral care reporting units, resulting in residual goodwill of $107.1 million, $0, and $0, respectively. During the three months ended December 31, 2025, we assessed the fair value of our prior reporting units resulting in residual goodwill of $1,168.8 million and $881.3 million related to Consumer Self Care Americas and Consumer Self Care International, respectively.
There were no transfers within Level 3 fair value measurements during the three months ended March 28, 2026 or the year ended December 31, 2025 (refer to Note 10 for a discussion of derivatives).
Non-recurring Fair Value Measurements
The non-recurring fair values represent only those assets whose carrying values were adjusted to fair value during the reporting period.
Women’s Health, Infant Formula, and Oral Care Reporting Units
As a result of changes in the operating model, goodwill was reallocated to the Company’s new reporting units based on their estimated relative fair values. Although the aggregate estimated fair value and carrying value of the Company’s reporting units did not change as of the testing date, January 1, 2026, the reallocation of goodwill and fair value on a relative basis resulted in reporting units where the carrying value exceeded their estimated fair value. Goodwill impairments were identified for the Women’s Health, Infant Formula, and Oral Care reporting units.
We performed a quantitative goodwill impairment test utilizing a combination of discounted cash flow techniques and comparable market approach for each reporting unit. Our cash flow projections included revenue growth rates and projected margins based on the reporting unit’s growth plans (Level 3 inputs). Discount rates and long‑term growth rates were developed for each reporting unit to reflect the rates of return and growth assumptions that market participants would apply, considering the relative risk profiles of the respective businesses.
Where appropriate, we also applied valuation multiples derived under the market approach based on a peer group of comparable companies, utilizing both observable and unobservable market data (Level 2 and Level 3 inputs, respectively). The market approach was applied to the Women’s Health and Oral Care reporting units but was not considered appropriate for Infant Formula. The key assumptions used in both the income and market approaches are summarized in the table below.
Perrigo Company plc - Item 1
Note 9
. | | | | | | | | | | | | | | | | | | | | |
Reporting Unit | | Discount Rate | | Long-Term Growth Rate | | GPCM Multiple |
Women’s Health | | 14.0 | % | | 2.5 | % | | 7.6x |
Infant Formula | | 10.0 | % | | 2.5 | % | | n/a* |
Oral Care | | 10.0 | % | | 2.5 | % | | 8.0x |
*The market approach was not considered applicable for the Infant Formula reporting unit.
Consumer Self Care Americas (“CSCA”) and Consumer Self Care International (“CSCI”) Prior Reporting Units
During the year ended December 31, 2025, we prepared a goodwill impairment test utilizing a combination of discounted cash flow techniques and comparable company market approach for each of our prior reporting units. Our cash flow projections included revenue growth rates and projected margins based on the reporting unit’s growth plans (Level 3 inputs). In our discounted cash flow analysis, we used a long-term growth rate of 2.5% for CSCA and 2.5% for CSCI. We used a discount rate of 11.5% for CSCA and 11.0% for CSCI in the analysis, which correlates with the required investment return and risk that we believe market participants would apply to the projected growth rate. In our comparable company market approach, we considered observable and unobservable market information (Level 2 and 3 inputs, respectively) which resulted in selected current and forward multiples averaging 7.0x of comparable adjusted earnings for CSCA. For CSCI, the current and forward multiples averaged 8.1x of comparable adjusted earnings.
Kazmira LLC
During the three months ended December 31, 2025, we identified potential indicators of impairment of our equity method investment in Kazmira LLC. We utilized an income approach, specifically a liquidation value method, to estimate the fair value based on the realizable value of Kazmira’s tangible assets. We concluded the fair value of our investment in Kazmira LLC was $3.5 million as of December 31, 2025 (refer to Note 6).
Prevacid® Branded Product
During the year ended December 31, 2025, we measured the impairment of our Prevacid® branded product, a definite-lived intangible asset. We utilized a discounted cash flow technique to estimate the fair value of the asset. Significant valuation inputs and assumptions relate to our projected future contribution margin, which include our estimated market share at planned investment levels and the expected selling price. We concluded the fair value was $5.5 million as of December 31, 2025.
Fixed Rate Long-term Debt
Our fixed rate long-term debt consisted of the following (in millions):
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| March 28, 2026 | December 31, 2025 |
| Public Bonds | Level 1 | | Level 1 | | |
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| Carrying value (excluding discount) | $ | 2,262.2 | | | $ | 2,270.5 | | | |
| Fair value | $ | 1,962.3 | | | $ | 2,149.8 | | | |
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The fair values of our public bonds for all periods were based on quoted market prices.
The carrying amounts of our other financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, short-term debt, revolving credit agreements, and variable rate long-term debt, approximate their fair value.
NOTE 10 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Interest Rate Swaps
We have $1.2 billion notional amount of variable-to-fixed interest rate swaps used to economically hedge interest rate risk on a substantial portion of our Senior Secured Credit Facilities (as defined in Note 11). The interest rate
Perrigo Company plc - Item 1
Note 10
swaps were designated as cash flow hedges to fix the variable interest rate. As a designated cash flow hedge, changes in fair value will be deferred in AOCI and recognized within Interest expense, net when interest is paid on the Senior Secured Credit Facilities.
As of March 28, 2026, the designated instruments used to hedge the exposure to variable interest on the Senior Secured Credit Facilities totaled $1.2 billion notional amount of which $487.5 million and $712.5 million notional amounts are effective through April 2027 and April 2029, respectively.
As of March 28, 2026, the undesignated economically offsetting interest rate swaps totaling $600.0 million are effective through April 2029.
Cross-currency Swaps
We have $2.3 billion notional amount fixed-for-fixed cross-currency interest rate swaps designated as net investment hedges to hedge the European Euro (“EUR”) currency exposure of our investment in European operations. As designated net investment hedges, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Condensed Consolidated Statements of Operations when the hedged EUR net investment is substantially liquidated. Gains and losses on excluded components (e.g., interest differentials) will be recorded in Interest expense, net on a systematic and rational basis.
As of March 28, 2026, of the total $2.3 billion notional amount, $1.0 billion, $300.0 million, $450.0 million, $380.0 million, and $200.0 million notional amounts are effective through April 2027, September 2028, November 2030, December 2030, and March 2033, respectively.
Other Hedging Instruments
The €350.0 million 2032 Notes (as defined in Note 11) are designated as a net investment hedge on our investment in European operations.
As a designated net investment hedge, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Condensed Consolidated Statements of Operations when the hedged EUR net investment is substantially liquidated.
Perrigo Company plc - Item 1
Note 10
Foreign Currency Forwards
Notional amounts of foreign currency forward contracts were as follows (in millions):
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| | March 28, 2026 | | December 31, 2025 |
| British Pound (GBP) | | $ | 163.2 | | | $ | 148.1 | |
| European Euro (EUR) | | 155.5 | | | 50.1 | |
| United States Dollar (USD) | | 114.6 | | | 160.6 | |
| Danish Krone (DKK) | | 46.0 | | | 56.8 | |
| Swedish Krona (SEK) | | 36.6 | | | 48.6 | |
| Polish Zloty (PLZ) | | 32.3 | | | 43.3 | |
| Canadian Dollar (CAD) | | 22.4 | | | 21.2 | |
| Hungarian Forint (HUF) | | 15.4 | | | 11.0 | |
| Chinese Yuan (CNH) | | 14.2 | | | 16.3 | |
| Norwegian Krone (NOK) | | 5.3 | | | 4.6 | |
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Other(1) | | 29.7 | | | 18.1 | |
| Total | | $ | 635.3 | | | $ | 578.7 | |
(1) Number consists of notional amounts of various currencies, none of which individually exceed $10.0 million in either year presented.
The maximum term of our forward currency exchange contracts is 60 months.
On August 1, 2025, we entered into a deal-contingent EUR/USD forward contract of €300 million to hedge foreign exchange risk related to the proceeds expected for the planned divestiture of our Dermacosmetics Business (refer to Note 3 for additional details). The contract is contingent on the successful closing of the transaction. If the divestiture does not close by January 13, 2027, the derivative will be terminated with no settlement obligation.
Effects of Derivatives on the Financial Statements
The below tables indicate the effects of all derivative instruments on the Condensed Consolidated Financial Statements. All amounts exclude income tax effects.
The balance sheet location and gross fair value of our derivative instruments were as follows (in millions):
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| Balance Sheet Location | | March 28, 2026 | | December 31, 2025 |
| Designated derivative assets: | | | | | |
| Foreign currency forward contracts | Prepaid expenses and other current assets | | $ | 0.6 | | | $ | 0.3 | |
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| Interest rate swap agreements | Other non-current assets | | 2.8 | | | 1.1 | |
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| Total designated derivative assets | | | $ | 3.4 | | | $ | 1.4 | |
| Non-designated derivative assets: | | | | | |
| Foreign currency forward contracts | Prepaid expenses and other current assets | | $ | 5.0 | | | $ | 2.1 | |
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| Total non-designated derivatives | | | $ | 5.0 | | | $ | 2.1 | |
| Designated derivative liabilities: | | | | | |
| Foreign currency forward contracts | Other accrued liabilities | | $ | 1.7 | | | $ | 1.1 | |
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| Cross-currency swaps | Other non-current liabilities | | 211.1 | | | 265.6 | |
| Interest rate swap agreements | Other non-current liabilities | | 13.4 | | | 22.0 | |
| Total designated derivative liabilities | | | $ | 226.2 | | | $ | 288.7 | |
| Non-designated derivative liabilities: | | | | | |
| Foreign currency forward contracts | Other accrued liabilities | | $ | 3.1 | | | $ | 13.4 | |
| Interest rate swap agreements | Other non-current liabilities | | 10.0 | | | 10.8 | |
| Total non-designated derivative liabilities | | | $ | 13.1 | | | $ | 24.2 | |
Perrigo Company plc - Item 1
Note 10
The amounts of (income)/expense recognized in earnings related to our non-designated derivatives on the Condensed Consolidated Statements of Operations were as follows (in millions):
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| Non-Designated Derivatives | | Income Statement Location | | March 28, 2026 | | March 29, 2025 | | | | |
| Foreign currency forward contracts | | Other (income), net | | $ | 2.2 | | | $ | (4.8) | | | | | |
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| Interest rate swap agreements | | Interest expense, net | | $ | — | | | $ | 0.2 | | | | | |
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The following tables summarize the effect of derivative instruments designated as hedging instruments in AOCI (in millions):
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| | | | Gain or (Loss) Reclassified from AOCI into Earnings |
| | | | Related to Amounts Included in Effectiveness Testing | | Related to Amounts Excluded from Effectiveness Testing |
| | Amount of Gain or (Loss) Recognized in OCI(1) | | Location of Gain or (Loss) | | Amount Reclassified(2) | | Location of Gain or (Loss) | | Amount Reclassified(2) |
| Three Months Ended March 28, 2026 | | | | | | | | |
| Cash flow hedges | | | | | | | | | | |
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| Interest rate swap agreements | | $ | 9.8 | | | Interest expense, net | | $ | 1.2 | | | Interest expense, net | | $ | — | |
| Foreign currency forward contracts | | (1.0) | | | Net sales | | — | | | Net sales | | 0.1 | |
| | | | Cost of sales | | (0.7) | | | Cost of sales | | — | |
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| Total Cash flow hedges | | $ | 8.8 | | | | | $ | 0.5 | | | | | $ | 0.1 | |
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| Net investment hedges | | | | | | | | | | |
| Cross-currency swaps | | $ | 55.2 | | | | | | | Interest expense, net | | $ | 8.2 | |
| Euro Notes Due 2032 | | 8.2 | | | | | | | | | |
| Total Net investment hedges | | $ | 63.4 | | | | | | | | | $ | 8.2 | |
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| Three Months Ended March 29, 2025 | | | | | | | | |
| Cash flow hedges | | | | | | | | | | |
| Interest rate swap agreements | | $ | (11.1) | | | Interest expense, net | | $ | 4.7 | | | Interest expense, net | | $ | — | |
| Foreign currency forward contracts | | 0.5 | | | Net sales | | — | | | Net sales | | (0.1) | |
| | | | Cost of sales | | 0.4 | | | Cost of sales | | 0.1 | |
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| Total Cash flow hedges | | $ | (10.6) | | | | | $ | 5.1 | | | | | $ | — | |
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| Net investment hedges | | | | | | | | | | |
| Cross-currency swaps | | $ | 59.9 | | | | | | | Interest expense, net | | $ | 9.4 | |
| Euro Notes Due 2032 | | (16.4) | | | | | | | | | |
| Total Net investment hedges | | $ | 43.5 | | | | | | | | | $ | 9.4 | |
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(1) Net income of $36.9 million is expected to be reclassified out of AOCI into earnings during the next 12 months.
(2) For additional details about the effect of the amounts reclassified from AOCI refer to Note 13.
Perrigo Company plc - Item 1
Note 10
The classification and amount of gain/(loss) recognized in earnings related to fair value and hedging relationships on the Condensed Consolidated Statement of Operations were as follows (in millions):
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| | Net Sales | | Cost of Sales | | Interest Expense, net | | Other (Income) Expense, net |
| Three Months Ended March 28, 2026 | | | | | | | | |
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | | $ | 969.2 | | | $ | 643.7 | | | $ | 40.8 | | | $ | (6.0) | |
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| Gain (loss) on cash flow hedging relationships | | | | | | | | |
| Foreign currency forward contracts | | | | | | | | |
Amount of gain reclassified from AOCI into earnings | | $ | — | | | $ | (0.7) | | | $ | — | | | $ | — | |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | | $ | 0.1 | | | $ | — | | | $ | — | | | $ | — | |
| Interest rate swap agreements | | | | | | | | |
Amount of gain reclassified from AOCI into earnings | | $ | — | | | $ | — | | | $ | 1.2 | | | $ | — | |
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| Three Months Ended March 29, 2025 | | | | | | | | |
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | | $ | 1,043.9 | | | $ | 651.6 | | | $ | 39.0 | | | $ | (0.4) | |
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| Gain (loss) on cash flow hedging relationships | | | | | | | | |
| Foreign currency forward contracts | | | | | | | | |
Amount of gain reclassified from AOCI into earnings | | $ | — | | | $ | 0.4 | | | $ | — | | | $ | — | |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | | $ | (0.1) | | | $ | 0.1 | | | $ | — | | | $ | — | |
| Interest rate swap agreements | | | | | | | | |
Amount of gain reclassified from AOCI into earnings | | $ | — | | | $ | — | | | $ | 4.7 | | | $ | — | |
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Perrigo Company plc - Item 1
Note 11
NOTE 11 - INDEBTEDNESS
Total borrowings are summarized as follows (in millions):
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| | | | | March 28, 2026 | | December 31, 2025 |
| Revolvers | | | | | |
| 2026 Revolver due March 20, 2031 | | | $ | 427.6 | | | $ | — | |
| Total revolvers | | | $ | 427.6 | | | $ | — | |
| Term loans | | | | | |
| Term A Loans due April 20, 2027(1) | | | $ | — | | | $ | 421.9 | |
| Term B Loans due April 20, 2029(1) | | | 970.0 | | | 972.4 | |
| Total term loans | | | $ | 970.0 | | | $ | 1,394.3 | |
| Notes and Bonds | | | | | |
| Coupon | Due | | | | | |
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| 4.900% | June 15, 2030(2) | | | 750.0 | | | 750.0 | |
* | 5.375% | September 30, 2032(3) | | | 402.8 | | | 411.1 | |
| 6.125% | September 30, 2032(3) | | | 715.0 | | | 715.0 | |
| 5.300% | November 15, 2043 | | | 90.5 | | | 90.5 | |
| 4.900% | December 15, 2044 | | | 303.9 | | | 303.9 | |
| Total notes and bonds | | | 2,262.2 | | | 2,270.5 | |
| Other financing | 12.4 | | | 12.9 | |
| Unamortized discount | (18.7) | | | (19.7) | |
| Deferred financing fees | (21.0) | | | (17.8) | |
| Total borrowings outstanding | 3,632.5 | | | 3,640.2 | |
| Current indebtedness | (11.4) | | | (36.6) | |
| Total long-term debt less current portion | $ | 3,621.1 | | | $ | 3,603.6 | |
(1) Discussed collectively herein as the "Senior Secured Credit Facilities".
(2) The coupon rate noted above is as of March 28, 2026. This increased from 4.900% to 5.150% on payments starting after June 15, 2026, following a credit rating downgrade by Moody's Investor Services in the last quarter of 2025. Interest rate adjustments are subject to a 2.0% total cap above the original 3.150% interest rate which would result in an interest rate not to exceed 5.150% based on certain rating events as specified in the Note’s Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. With the 5.150% interest rate, we have reached the maximum interest rate permitted under the Supplemental Indenture No. 3 for the Notes due 2030.
(3) Discussed below collectively as the “2032 Notes”.
* Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.
Credit Agreements
On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the “Borrower”) entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the “Revolver”), (ii) a $500.0 million five-year Term Loan A facility (the “Term Loan A Facility” and the Term A Loans thereunder, the “Term A Loans”), and (iii) a $1.1 billion seven-year Term Loan B facility (the “Term Loan B Facility” and the Term B Loans thereunder borrowed on April 20, 2022, the “2022 Term B Loans”, pursuant to a Credit Agreement (the “Credit Agreement”).
On December 15, 2023, we and the Borrower entered into Amendment No. 1 and Incremental Assumption Agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the “2023 Incremental Term B Loans”). The terms of the 2023 Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The net proceeds from the 2023 Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance Unlimited Company (“Perrigo Finance”), a public unlimited company incorporated under the laws of Ireland and an indirect wholly-owned finance subsidiary of Perrigo for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 (“2024 Notes”). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest). On December 15, 2024, we and the Borrower entered into Amendment
Perrigo Company plc - Item 1
Note 11
No. 2 to the Credit Agreement, which established a new tranche of loans under the Term B Facility (the “Term B Loans”) and which refinanced all of the 2023 Incremental Term B Loans and the 2022 Term B Loans outstanding under the Credit Agreement in the aggregate amount of $984.7 million, which resulted in a repricing to lower interest rate and increased the discount by $1.5 million. The Term B Loans will mature on April 20, 2029.
On March 20, 2026, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with Perrigo Investments, the other subsidiaries of the Company named therein, JPMorgan Chase Bank, N.A. and J. P. Morgan SE, as administrative agent, JPMorgan Chase Bank, N.A., as collateral agent and the other lenders party thereto. The Amended and Restated Credit Agreement amends and restates the Credit Agreement to, among other things, (i) extend the maturity of the Revolving Facility (defined below), (ii) eliminate the credit spread adjustment applicable to loans under the Revolving Facility and (iii) amend such other provisions of the Credit Agreement for the benefit of the Company. The Amended and Restated Credit Agreement provides for a $1.0 billion revolving credit facility maturing on March 20, 2031 (the “Revolving Facility”) and a $972.4 million term loan B facility maturing on April 20, 2029 (the “Term Loan B Facility” and together with the Revolving Facility, the “Senior Secured Credit Facilities”). The outstanding balance and maturity date of the Term Loan B Facility remains unchanged under the Amended and Restated Credit Agreement. The Company used the proceeds from a drawdown on the Revolving Facility to prepay the Term A Loans (as defined in the Credit Agreement) in their entirety, together with any accrued and unpaid interest and fees thereon and pay any associated transaction costs.
The Senior Secured Credit Facilities are being incurred by Perrigo Investments and will continue to be guaranteed, along with any hedging or cash management obligations entered into with a lender, by the Company and certain other wholly-owned subsidiaries of the Company (the “Guarantor Subsidiaries”). Additionally, the Borrower and the Guarantor Subsidiaries provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Guarantor Subsidiaries, the Company and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 4.900% Notes due 2030, the 6.125% USD Notes due 2032, the 5.375% Euro Notes due 2032 and the 4.900% Notes due 2044 issued by Perrigo Finance.
We are subject to financial covenants in the Senior Secured Credit Facilities. The agreements contain financial covenants that require the Borrower and its restricted subsidiaries to (a) not exceed a maximum first lien secured net leverage ratio of 3.00 to 1.00 at the end of each fiscal quarter and (b) not fall below a minimum interest coverage ratio of 3.00 to 1.00 at the end of each fiscal quarter, provided that such covenants apply only to the Revolving Facility and the Term Loan B Facility. If we consummate certain qualifying acquisitions during the term of the loan, we can elect to increase the maximum first lien secured net leverage ratio covenant to 3.25 to 1.00 for the quarter in which the acquisition occurs and the three following fiscal quarters thereafter.
During the three months ended March 28, 2026, principal repayments of $424.4 million were made on the Term Loan A Facility and Term Loan B Facility.
As of March 28, 2026, borrowings outstanding under the Revolving Facility totaled $427.6 million. There were no borrowings outstanding under the Revolver as of December 31, 2025.
We were in compliance with all the covenants under our debt agreements as of March 28, 2026.
Other Financing
We have overdraft facilities available that we use to support our cash management operations. We report any balances outstanding in the above table under “Other financing”. There were no material borrowings outstanding under the overdraft facilities as of March 28, 2026 or December 31, 2025.
We have financing leases that are reported in the above table under “Other financing” (refer to Note 7).
Perrigo Company plc - Item 1
Note 12
NOTE 12 - EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY
Earnings per Share
A reconciliation of the numerators and denominators used in our basic and diluted earnings per share (“EPS”) calculation is as follows (in millions):
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| | Three Months Ended | | |
| | March 28, 2026 | | March 29, 2025 | | | | |
| Numerator: | | | | | | | |
| Income (loss) from continuing operations | $ | (389.8) | | | $ | 0.1 | | | | | |
| Loss from discontinued operations, net of tax | (8.7) | | | (6.5) | | | | | |
| Net income (loss) | $ | (398.6) | | | $ | (6.4) | | | | | |
| Denominator: | | | | | | | |
| Weighted average shares outstanding for basic EPS | 138.7 | | | 137.7 | | | | | |
Dilutive effect of share-based awards(1) | — | | | — | | | | | |
| Weighted average shares outstanding for diluted EPS | 138.7 | | | 137.7 | | | | | |
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(1) In the period of a net loss, diluted shares equal basic shares.
Shareholders' Equity
Our common stock consists of ordinary shares of Perrigo Company plc, a public limited company incorporated under the laws of Ireland.
Our common equity has traded on the New York Stock Exchange under the symbol PRGO since June 6, 2013. Prior to that, our common equity traded on the Nasdaq Global Select Market under the same symbol. Our common equity was also traded on the Tel Aviv Stock Exchange (“TASE”) under the same symbol between March 16, 2005 and February 23, 2022, when we voluntarily delisted from trading in connection with the Rx business divestiture.
NOTE 13 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in our AOCI balances, net of tax were as follows (in millions):
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| Fair Value of Derivative Financial Instruments, net of tax | | Foreign Currency Translation Adjustments, net of tax | | | | Post-Employment Plan Adjustments, net of tax | | Total AOCI |
| Balance at December 31, 2025 | $ | (1.2) | | | $ | 9.3 | | | | | $ | (3.3) | | | $ | 4.8 | |
| OCI before reclassifications | 8.3 | | | (15.1) | | | | | (0.5) | | | (7.3) | |
| Amounts reclassified from AOCI | (0.5) | | | | | | | | | (0.5) | |
| Other comprehensive income (loss) | $ | 7.8 | | | $ | (15.1) | | | | | $ | (0.5) | | | $ | (7.8) | |
| Balance at March 28, 2026 | $ | 6.6 | | | $ | (5.8) | | | | | $ | (3.8) | | | $ | (3.0) | |
For additional details about the effect of the amounts reclassified from AOCI refer to Note 10. The tax effects on the net activity related to each component of other comprehensive income (loss), were as follows (in millions):
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| Three Months Ended | | |
| Tax (benefit) expense | March 28, 2026 | | March 29, 2025 | | | | |
| Fair value of derivative financial instruments | $ | — | | | $ | (3.9) | | | | | |
| Foreign currency translation adjustments | — | | | (18.7) | | | | | |
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| (Benefit) expense for income taxes related to other comprehensive income (loss) | $ | — | | | $ | (22.6) | | | | | |
Perrigo Company plc - Item 1
Note 13
Except for the tax effects of foreign currency translation adjustments related to our foreign-denominated notes and cross-currency interest rate swaps designated as net investment hedges (refer to Note 10), income taxes were not provided for foreign currency translation. Generally, the assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rate. For those operations, changes in exchange rates generally do not affect cash flows; therefore, resulting translation adjustments are made in the Condensed Consolidated Statements of Shareholders' Equity rather than in the Condensed Consolidated Statements of Operations.
NOTE 14 - RESTRUCTURING CHARGES
We periodically take action to reduce redundant expenses and improve operating efficiencies. Restructuring activity includes severance, lease exit costs, and related consulting fees. The following reflects our restructuring activity (in millions):
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| Three Months Ended |
| March 28, 2026 | | |
| Supply Chain
Reinvention | | Project Energize | Nutrition Network Optimization | Operational Enhancement Program | Total | | |
| Beginning balance | $ | — | | | $ | 24.3 | | $ | 18.3 | | $ | 2.6 | | $ | 45.2 | | | |
| Additional charges | 0.1 | | | (0.3) | | 2.2 | | 73.1 | | 75.1 | | | |
| Payments | (0.1) | | | (4.6) | | — | | (10.6) | | (15.3) | | | |
| Non-cash adjustments | — | | | (5.2) | | — | | (1.1) | | (6.3) | | | |
| | | | | | | | |
| Ending balance | $ | — | | | $ | 14.2 | | $ | 20.5 | | $ | 64.0 | | $ | 98.7 | | | |
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| March 29, 2025 |
| Supply Chain
Reinvention | HRA Pharma
Integration | Project Energize | Nutrition Network Optimization | Other Initiatives | Total |
| Beginning balance | $ | 2.3 | | $ | 1.6 | | 27.9 | | $ | — | | $ | 1.0 | | $ | 32.8 | |
| Additional charges | 4.7 | | — | | 8.2 | | 16.5 | | — | | 29.4 | |
| Payments | (6.2) | | — | | (9.4) | | — | | (1.0) | | (16.6) | |
| Non-cash adjustments | — | | — | | — | | — | | — | | — | |
| | | | | | |
| Ending balance | $ | 0.8 | | $ | 1.6 | | $ | 26.7 | | $ | 16.5 | | $ | — | | $ | 45.6 | |
The charges incurred during the three months ended March 28, 2026 were primarily associated with employee separation costs as a result of the Operational Enhancement Program. The charges incurred during the three months ended March 29, 2025 were primarily associated with employee separation costs as a result of the actions taken to optimize our nutrition network.
Of the amount recorded during the three months ended March 28, 2026, $36.6 million and $12.2 million were related to our Self Care and Specialty Care segments, respectively, due primarily to the Operational Enhancement Program, and $7.6 million related to our Infant Formula segment, due primarily to Nutrition Network Optimization. Charges totaling $13.5 million primarily for separation costs associated with the Operational Enhancement Program were corporate costs not allocated to a reporting segment.
Of the amount recorded during the three months ended March 29, 2025, $5.3 million and $1.8 million were related to our Self Care and Specialty Care segments, respectively, due primarily to Project Energize, and $16.5 million related to our Infant Formula segment, due primarily to Nutrition Network Optimization. Charges totaling $5.5 million
primarily for separation costs associated with Project Energize were corporate costs not allocated to a reporting segment.
There were no other material restructuring programs for the periods presented. All charges are recorded in Restructuring expense on the Condensed Consolidated Statements of Operations. The remaining $98.7 million liability for employee severance benefits and consulting fees is expected to be mostly paid within the next year, with the exception of the entirety of all charges recorded for the Nutrition Network Optimization, which are recorded as a
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long term liability on the Condensed Consolidated Balance Sheets as they are not currently expected to be paid out until 2028.
NOTE 15 - INCOME TAXES
The effective tax rates were as follows:
| | | | | | | | | | | | | | | | |
| Three Months Ended | | | | |
| March 28, 2026 | | March 29, 2025 | | | | | | | | |
| 4.6 | % | | 99.0 | % | | | | | | | | |
The effective tax rate on the pre-tax loss for the three months ended March 28, 2026 decreased when compared to the effective tax rate on the pre-tax income for the three months ended March 29, 2025, primarily due to the release of reserves for uncertain tax positions in 2026, the impact of goodwill impairments in 2026, and changes in the jurisdictional mix of income.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant changes to federal tax law and permanently extends or modifies various provisions from the 2017 Tax Cuts and Jobs Act, including, but not limited to, deductions for federal bonus depreciation, domestic research and development expenditures, and certain changes, some taxpayer-favorable and others not, for determining the limitation on business interest expense. We evaluated the OBBBA provisions enacted and determined they resulted in a tax benefit of $21.7 million for 2025, primarily due to the increased realizability of deferred tax assets associated with interest expense carryforwards following the restoration of depreciation and amortization in the Section 163(j) business interest expense limitation calculation. The remaining provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented over subsequent years. We are not anticipating the remaining provisions of the OBBBA to have a material effect on our consolidated financial statements.
The Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of member countries, has recommended changes to numerous long-standing tax principles. In particular, the OECD's Pillar Two initiative introduces a global per-country minimum tax of 15%. Pillar Two legislation has been enacted or substantively enacted in many of the jurisdictions in which we operate. We are in compliance with the OECD’s Pillar Two framework. After a comprehensive assessment, we have determined that there is no material impact on our financial results as a result of the implementation of the Pillar Two framework to date.
We believe that our existing global tax strategies will adequately address any necessary adjustments to comply with Pillar Two without significantly affecting our effective tax rate or overall financial position. We will continue to monitor regulatory developments to ensure ongoing compliance, but we do not anticipate any adverse effects on our operations or profitability due to the implementation of the Pillar Two framework.
Internal Revenue Service Audits of Perrigo Company, a U.S. Subsidiary
Perrigo Company, our U.S. subsidiary (“Perrigo U.S.”), is engaged in a series of tax disputes in the U.S. relating primarily to transfer pricing adjustments including income in connection with the purchase, distribution, and sale of store-brand OTC pharmaceutical products in the United States, including the heartburn medication omeprazole. On August 27, 2014, we received a statutory notice of deficiency from the Internal Revenue Service (“IRS”) relating to our fiscal tax years ended June 27, 2009, and June 26, 2010 (the “2009 tax year” and “2010 tax year”, respectively). On April 20, 2017, we received a statutory notice of deficiency from the IRS for the years ended June 25, 2011 and June 30, 2012 (the “2011 tax year” and “2012 tax year”, respectively). Specifically, both statutory notices proposed adjustments related to the offshore reporting of profits on sales of omeprazole in the United States resulting from the assignment of an omeprazole distribution contract to an Israeli affiliate. In addition to the transfer pricing adjustments, which applied to all four tax years, the statutory notice of deficiency for the 2011 and 2012 tax years included adjustments requiring the capitalization and amortization of certain legal expenses that were deducted when paid or incurred in defending against certain patent infringement lawsuits related to Abbreviated New Drug Applications (“ANDAs”) filed with a Paragraph IV Certification.
We do not agree with the audit adjustments proposed by the IRS in either of the notices of deficiency. We paid the assessed amounts of tax, interest, and penalties set forth in the statutory notices and timely filed claims for refund on June 11, 2015 for the 2009 and 2010 tax years, and on June 7, 2017, for the 2011 and 2012 tax years. On August 15, 2017, following disallowance of such refund claims, we timely filed a complaint in the United States
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Note 15
District Court for the Western District of Michigan seeking refunds of tax, interest, and penalties of $27.5 million for the 2009 tax year, $41.8 million for the 2010 tax year, $40.1 million for the 2011 tax year, and $24.7 million for the 2012 tax year, for a total of $134.1 million, plus statutory overpayment interest thereon from the dates of payment. The amounts sought in the complaint for the 2009 and 2010 tax years were recorded as deferred charges in Other non-current assets on our balance sheet during the three months ended March 28, 2015, and the amounts sought in the complaint for the 2011 and 2012 tax years were recorded as deferred charges in Other non-current assets on our balance sheet during the three months ended July 1, 2017.
A bench trial was held during the period May 25, 2021 to June 7, 2021 for the refund case in the United States District Court for the Western District of Michigan. The total amount of cumulative deferred charge that we are seeking to receive in this litigation is approximately $113.3 million, which reflects the impact of conceding that Perrigo U.S. should have received a 5.24% royalty on all omeprazole sales. That concession was previously paid and is the subject of the above refund claims. The issues outlined in the statutory notices of deficiency described above are continuing in nature, and the IRS will likely carry forward the adjustments set forth therein as long as the OTC medication is sold, in the case of the omeprazole issue, and for all post-2012 Paragraph IV filings that trigger patent infringement suits, in the case of the ANDA issue. On September 25, 2025, the court issued an opinion in the case that predominantly sided with Perrigo U.S. on both the omeprazole and the ANDA issues. The court ordered the parties to submit computations implementing the opinion and to submit a proposed final judgment by January 23, 2026, as extended. The court, thereafter, issued a final, appealable judgment on January 27, 2026. On March 26, 2026, the opinion of the District Court was appealed by the Department of Justice. Perrigo followed by filing a cross appeal on April 6, 2026.
On January 13, 2021, the IRS issued a 30-day letter and Revenue Agent's Report (“RAR”) with respect to its audit of our fiscal tax years ended June 29, 2013, June 28, 2014, and June 27, 2015. The 30-day letter proposed, among other modifications, transfer pricing adjustments in connection with the distribution of omeprazole consistent with the IRS position in the prior years in the aggregate amount of $141.6 million and ANDA-related adjustments in the aggregate amount of $21.9 million. We timely filed a protest to the 30-day letter for those additional adjustments but noted that, due to the pending refund litigation described above, IRS Appeals would not consider the merits of the omeprazole or ANDA matters. We believe that we should prevail on the merits on both carryforward issues and have reserved for taxes and interest payable on the 5.24% deemed royalty on omeprazole through the tax year ended December 31, 2018. Beginning with the tax year ended December 31, 2019, we began reporting income commensurate with the 5.24% deemed royalty. We have not reserved for the ANDA-related issue described above. While we believe we should prevail on the merits of this case, the outcome remains uncertain. If our litigation position on the omeprazole issue is not ultimately sustained as part of any appeal, the outcome for the 2009–2012 tax years could range from a reduction in the refund amount to denial of any refund. In addition, we expect that the outcome of the refund litigation could effectively bind future tax years. In that event, a final adverse ruling on the omeprazole issue could have a material impact on subsequent periods (i.e., 2013 to date), with additional tax liability in the range of $25.0 million to $128.0 million, not including interest and any applicable penalties.
On December 2, 2021, the IRS commenced an audit of our federal income tax returns for the tax years ended December 31, 2015, through December 31, 2019, which remains ongoing. On March 12, 2025, the IRS issued a NOPA to reduce Perrigo U.S.’s deductible interest expense for the 2015 through 2018 tax years by $348.2 million, using the same interest rates that we agreed with IRS Appeals for the 2014 and 2015 tax years, and a Closing Agreement has been since executed that resolves this issue with finality. We previously adjusted our reserves using such interest rates and, as a result, we are fully reserved for the adjustment specified in the NOPA.
On February 27, 2026, the IRS issued a NOPA proposing to reallocate income via transfer pricing adjustments arising from the activities of Perrigo Ireland for the 2016 through 2019 tax years. Although we strongly disagree with the IRS’ position and intend to pursue administrative and/or judicial remedies the ultimate resolution is uncertain.
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Note 16
NOTE 16 - COMMITMENTS AND CONTINGENCIES
In view of the inherent difficulties of predicting the outcome of various types of legal proceedings, we cannot determine the ultimate resolution of the matters described below. We establish reserves for litigation and regulatory matters when losses associated with the claims become probable and the amounts can be reasonably estimated. The actual costs of resolving legal matters may be substantially higher or lower than the amounts reserved for those matters. For matters where the likelihood or extent of a loss is not probable or cannot be reasonably estimated as of March 28, 2026, we have not recorded a loss reserve. If certain of these matters are determined against us, there could be a material adverse effect on our financial condition, results of operations, or cash flows. We currently believe we have valid defenses to the claims in these lawsuits and intend to defend these lawsuits vigorously regardless of whether or not we have a loss reserve. Other than what is disclosed below, we do not expect the outcome of the litigation matters to which we are currently subject to have, individually or in the aggregate, a material adverse effect on our financial condition, results of operations, or cash flows.
Price-Fixing Lawsuits Related to the Company's Former Rx Business
Beginning in 2016, the Company, along with other manufacturers, was named as a defendant in lawsuits in the United States and Canada generally alleging anticompetitive conduct with respect to the sale of generic drugs by the Company’s former Rx business. The complaints have been filed by putative classes of direct purchasers, end payors, and indirect resellers, as well as individual direct and indirect purchasers that have opted out of the putative classes, including pharmacies, health insurers, hospitals, self-insured employers, retail customers and certain cities and counties. The complaints allege a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for various generic drugs in violation of federal and state antitrust and consumer protection laws. There are 45 complaints naming Perrigo entities as defendants that are currently pending in the MDL court and several other state and federal courts. Five additional complaints naming Perrigo entities as defendants were filed in 2025 by certain pharmacy chains, health insurers and self-insured employers.
While most of the class complaints involve alleged single-drug conspiracies, the three putative classes and many of the opt-out plaintiffs have each filed over-arching conspiracy complaints alleging that Perrigo and other manufacturers (and some individuals) entered into an “overarching conspiracy” that involved allocating customers, rigging bids, and raising, maintaining, and fixing prices for various products. The vast majority of the lawsuits described in this section have been consolidated in the In re Generic Pharmaceuticals Pricing Antitrust Litigation multidistrict litigation (“MDL”) MDL No. 2724 (United States District Court for Eastern District of Pennsylvania).
The MDL Court initially designated three sets of cases to proceed as the first phase of “bellwethers,” meaning that they will proceed on a more expedited basis than the other cases in the MDL. Those cases are (a) class actions alleging “single drug” conspiracies, one set involving Clobetasol and one set involving Clomipramine; and (b) the third Complaint filed by the State Attorneys General alleging an overarching conspiracy concerning various topical products (described below). Perrigo was initially named as a defendant in the Clobetasol class bellwether cases, but the classes voluntarily dismissed their claims against Perrigo relating to “single drug” conspiracies involving Clobetasol in May 2023. Summary judgment motions in the State bellwether case were initially filed in September 2024, and briefing on those motions is complete. The court certified classes of direct and “end-user” customers of the products at issue in the bellwether class cases on March 7, 2025. The Third Circuit accepted an appeal of the class certification decisions in the class bellwether cases on June 17, 2025. All district court proceedings in those cases are stayed pending resolution of that appeal. Summary judgment motions in the State bellwether case were initially filed in September 2024, and briefing on those motions is complete. The district court denied motions for summary judgment concerning the alleged overarching conspiracy and status of limitations and granted in part and denied in part a motion for summary judgment concerning the damages, civil penalties, and other remedies that the states may seek. Several additional summary judgment motions, including Perrigo's company-specific summary judgment motion, remain to be decided. No trial date has been set for this case.
On October 15, 2024, the MDL Court selected the first multi-drug complaint brought by direct action plaintiff Humana, Inc., which names Perrigo as a defendant, to proceed in the second phase of bellwether cases in the MDL. Fact discovery in the Humana bellwether case closed on October 1, 2025. Expert discovery closed on February 27, 2026. Summary judgment briefing is underway and will be complete on May 15, 2026. Trial is scheduled to begin on September 15, 2026.
On September 26, 2025, the MDL Court selected three additional multi-drug complaints brought by direct action plaintiffs Kroger Co., Cigna Corp., and CVS Pharmacy, Inc., each of which names Perrigo as a defendant, to proceed in the third phase of bellwether cases in the MDL. The Court in February 2026 issued orders designating portions of the complaints in the Kroger and Cigna cases as bellwethers with the trials in those bellwethers set to
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Note 16
start in August 2027 and January 2028 respectively, and setting schedules for the remaining pretrial deadlines in those cases.
As of March 28, 2026, we reported a liability for the claims listed in the “Price-Fixing Lawsuits Related to the Company's Former Rx Business” section above for the reasonable estimates of probable loss (refer to Note 4). We intend to defend each of these lawsuits vigorously.
Securities Litigation
In the United States (cases related to events in 2023-2025)
On November 17, 2025, a purported securities class action complaint was filed against the Company and our current CEO, Patrick Lockwood-Taylor, CFO, Eduardo Bezerra, and former CEO, Murray Kessler, in the U.S. District Court for the Southern District of New York (Tanner French v. Perrigo Company plc, et al., filed 11/17/2025). The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 based on statements made by the Company and its current and former executives related to our infant formula business and the strategic review of the business announced in November 2025 on behalf of a purported class of shareholders for the period from February 27, 2023 through November 4, 2025, inclusive.
Pursuant to the Private Securities Litigation Reform Act of 1995, on February 13, 2026, the Court appointed the International Brotherhood of Teamsters Local No. 710 Pension Fund as Lead Plaintiff and approved Cohen Milstein to serve as lead counsel for the proposed class. On May 1, 2026, Lead Plaintiff Filed an Amended Complaint. We intend to defend the lawsuit vigorously.
Other Matters
Talcum Powder
The Company has been named, together with other manufacturers, in product liability lawsuits in a variety of state courts alleging that the use of body powder products containing talcum powder causes mesothelioma and lung cancer due to alleged asbestos contamination of the raw material talc. The majority of these cases involve legacy talcum powder products that have not been manufactured by the Company since 1999. As of the date of these financial statements, the Company has been named in approximately 300 individual lawsuits seeking compensatory and punitive damages. Nationwide the number of new cases against manufacturers and retailers of talc-containing products alleging injury related to asbestos-contaminated talc continues to grow. The Company has several defenses and continues to both vigorously defend these lawsuits and explore various means of expeditiously resolving these claims before trial, including through settlement of certain plaintiffs' claims. Trials for these lawsuits are currently scheduled throughout 2026 and 2027. There are currently over 40 trials set for these cases. The Company continues to evaluate these cases and vigorously defend itself against such claims while exploring resolution of certain of the claims, including through dismissals and settlement. Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their defense costs and liability relating to these cases.
Ranitidine
After regulatory bodies announced worldwide that ranitidine may potentially contain N-nitrosodimethylamine (“NDMA”), the Company promptly began testing its externally-sourced ranitidine Active Pharmaceutical Ingredients (“API”) and ranitidine-based products. On October 8, 2019, the Company halted shipments of those products based upon preliminary results and on October 23, 2019, the Company made the decision to conduct a voluntary retail market withdrawal.
In February 2020, the resulting actions involving Zantac® and other ranitidine products were transferred for coordinated pretrial proceedings to a MDL (In re Zantac®/Ranitidine Products Liability Litigation, MDL No. 2924) in the U.S. District Court for the Southern District of Florida. The Company successfully moved to dismiss the first set of Master Complaints in the MDL based on federal preemption, which the Court granted without prejudice.
After the filing of Amended Complaints, on June 30, 2021, the Court again dismissed all claims against the retail and distributor defendants with prejudice and on July 8, 2021, the Court again dismissed all claims against the Company, this time with prejudice. Appeals of these dismissal orders to the U.S. Court of Appeals for the 11th Circuit have been filed. In December 2022, the Court granted in full the brand defendants' Daubert motions, finding that Plaintiffs' causation experts' opinions were unreliable and thus inadmissible. The Court later ruled that it was appropriate to apply the same expert causation standards to the retail and distributor defendants as well as the
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Note 16
generic defendants, and the Court thereby ruled that its Daubert decision barring Plaintiffs' expert opinions applied equally to these defendants as well. Thus, the Court's rulings on both federal preemption and scientific causation grounds dismissed all claims against the Company on two independent grounds and are also binding on all claims remaining in the MDL Census Registry. Appeals of these orders have been filed to the 11th Circuit and oral arguments were held on October 10, 2025. The Company continues to vigorously defend itself against such claims at the appellate level.
As noted above, the Company has won multiple motions to dismiss in the MDL. The company has also won motions to dismiss at the state-court level, most recently in Illinois where the Circuit Court granted in full the Company's motions to dismiss based on federal preemption. The Company has also been dismissed from additional state court actions in California, Pennsylvania, Illinois, Ohio, New York, New Jersey, North Carolina, and Maryland. Plaintiffs elected not to appeal any of those state-court dismissals, with the exception of Illinois (where the Company prevailed on appeal). In April 2025, the Company reached a settlement in principle in the Illinois state court lawsuits, including in the sole case on appeal. The pending settlement is for an immaterial amount and is expected to be fully funded by insurance.
Other than the MDL and state court matters that have been dismissed at the trial court level, as of the date of these financial statements, the Company was also named in approximately 190 personal injury lawsuits in the state of California. In November 2024, the Company reached a settlement in principle in each of remaining Ranitidine California state court lawsuits. The pending settlement is for an immaterial amount and is expected to be fully funded by insurance.
In March 2025, a New Mexico state court granted in full Perrigo’s Motion to Dismiss a ranitidine action against the Company by the New Mexico Attorney General based on nuisance and negligence theories for lack of personal jurisdiction. The New Mexico Attorney General did not appeal that decision, which ended the case against the Company. With the dismissal of the New Mexico action, there are no active lawsuits against the Company in respect of ranitidine at the trial court level, in state or federal court.
Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their defense costs and liability relating to these cases.
Acetaminophen
In October 2022, the Judicial Panel on Multidistrict Litigation consolidated a number of pending actions filed in various federal courts alleging that prenatal exposure to acetaminophen is purportedly associated with the development of autism spectrum disorder (“ASD”) and attention-deficit/hyperactivity disorder (“ADHD”). The acetaminophen MDL is styled In re: Acetaminophen – ASD/ADHD Products Liability Litigation (MDL No. 3043) and is pending before the U.S. District Court for the Southern District of New York. Plaintiffs in the MDL asserted claims against Johnson & Johnson Consumer, Inc. (“JJCI”) (now known as Kenvue Brands LLC) and various retailer chains alleging that plaintiff-mothers took acetaminophen products while pregnant and that plaintiff-children developed ASD and/or ADHD as a result of prenatal exposure to these acetaminophen products. As of the date of these financial statements, the Company has not been named as a defendant in any Complaints filed in the MDL. Certain of the Company’s customers have made requests regarding indemnity from the Company for a portion of their defense costs and potential liability. The Company has agreed to defense cost-sharing arrangements with certain retailer customers.
On December 18, 2023, the MDL court granted in full defendants' motions to exclude testimony of Plaintiffs' general causation expert witnesses, finding Plaintiffs presented no reliable evidence of scientific causation between prenatal ingestion of acetaminophen and ASD or ADHD in children. Final judgment has been entered as to the majority of pending cases with an appeal proceeding in the Second Circuit. A small minority of cases were exempted from the Court’s dismissal to enable Plaintiffs to present an additional expert to be evaluated through a similar process as the larger majority to determine if they can withstand scientific causation through this new expert. However, on July 10, 2024, the Court granted in full defendants' motion to exclude testimony of Plaintiffs' new general causation expert witness in this subset of carve out cases for similar reasons as the Court's December 2023 Order. Final judgment was entered against the Plaintiffs in those carve out cases, which have now been appealed to the Second Circuit. The appeals before the Second Circuit are fully briefed and argument was held on November 17, 2025. Currently, it is not possible to assess reliably the outcome of these cases or reasonably estimate any potential future financial impact on the Company.
There are state court actions pending in California, Illinois and Florida against the manufacturers of Tylenol, and against certain retailer defendants for the sale of store brand acetaminophen. At this time, the Company is not named in any state court action, and no state court case has proceeded to trial.
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Phenylephrine
In September 2023, the Food and Drug Administration’s (“FDA”) Advisory Committee on Nonprescription Drugs issued an advisory opinion calling into question the efficacy of orally administered phenylephrine (“PE”) containing products as a nasal decongestant. While the FDA itself has thus far taken no action in response to the Advisory Committee opinion, several putative class action lawsuits were filed asserting various economic injury claims to consumers. These actions were consolidated into a MDL (In re: Oral Phenylephrine Marketing and Sales Practices Litigation, MDL No. 3089), pending before the U.S. District Court for the Eastern District of New York. The Court permitted Plaintiffs to file a streamlined and consolidated bellwether Complaint for purposes of testing the Plaintiffs’ case and enabling briefing on threshold issues. Defendants filed a consolidated Motion to Dismiss and the Court heard oral argument on that motion in September 2024. In October 2024, the Court dismissed in its entirety Plaintiffs’ Streamlined and Consolidated Bellwether Complaint, finding that all of Plaintiffs’ claims regarding PE were preempted by federal law, and further dismissing Plaintiffs’ RICO claims for lack of standing. Final judgment has been entered and a Notice of Appeal of the Court's dismissal to the Second Circuit was filed. Appellate briefing is fully submitted, and oral argument was held on March 4, 2026. No decision has been issued.
Individual arbitrations involving similar efficacy allegations have also been threatened or initiated against certain retailers in various arbitral forums. Some of the Company's retail customers sought indemnity and defense costs from the Company relating to these cases. Agreements are in place to resolve these matters.
PLD & Conry Litigation
Perrigo Company plc, L. Perrigo Company, and PBM Nutritionals, LLC (collectively, the “Perrigo Defendants”) are defendants in two pending litigations, P&L Development, LLC v. Gerber Products Company, et al. (the “PLD Action”), and Conry, et al. v. Gerber Products Company, et al. (the “Conry Action” and together with the PLD Action, the “Actions”), both of which are pending in the U.S. District Court for the Eastern District of New York. The PLD Action was brought by P&L Development, LLC (“PLD”), and the Conry Action was brought by a proposed class of Store Brand infant formula purchasers (the “Conry Plaintiffs”). Gerber Products Company (“Gerber”) is a co-defendant in both Actions. The Actions involve allegations that PLD entered into a memorandum of understanding with Gerber for Gerber to supply PLD with infant formula with which to compete with Perrigo, and that Gerber allegedly repudiated that commitment because of an agreement with the Perrigo Defendants, which unreasonably restrained trade in violation of Section 1 of the Sherman Act. The Actions also involve allegations that the Perrigo Defendants’ acquisition of the Gateway infant formula manufacturing facility from Gerber was anticompetitive. Motions to dismiss some or all claims are pending in both Actions, discovery is ongoing, and no trial date has been set.
Contingencies Accruals
As a result of the matters discussed in this Note, the Company has established a loss accrual for litigation contingencies where we believe a loss to be probable and for which an amount of loss can be reasonably estimated. Except as otherwise discussed for specific matters above, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to inherent uncertainties of litigation. As of March 28, 2026, the loss accrual for litigation contingencies reflected on the Condensed Consolidated Balance Sheet in Other accrued liabilities was $72.6 million, inclusive of the accrual related to Discontinued Operations. The Company also recorded a recovery receivable reflected on the Condensed Consolidated Balance Sheets in Prepaid expenses and other current assets of $35.2 million, inclusive of the recovery receivable related to Discontinued Operations, as of March 28, 2026. The Company’s management believes these accruals for contingencies are reasonable and sufficient based upon information currently available to management; however, there can be no assurance that final costs related to these contingencies will not exceed current estimates, nor any assurance as to the amount of such final costs that may be covered by insurance. In addition, we have other litigation matters pending for which we have not recorded any accruals because our potential liability for those matters is not probable or cannot be reasonably estimated based on currently available information. For those matters where we have not recorded an accrual but a loss is reasonably possible, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to the inherent uncertainties of litigation.
Perrigo Company plc - Item 1
Note 17
NOTE 17 - SEGMENT AND GEOGRAPHIC INFORMATION
During the first quarter of 2026, we implemented changes to our organizational structure and internal management reporting to better align with how the CODM evaluates segment performance and allocates resources going forward.
Our reporting segments are as follows:
| | | | | | | | |
Reporting Segment | | Product Categories |
Self Care | | Includes over-the-counter health and wellness products intended for consumer self-treatment of common conditions, such as pain & sleep, upper respiratory, digestive health and healthy lifestyle products including vitamins, minerals, and supplements and oral electrolyte beverages |
Specialty Care | | Includes branded and specialty consumer health products that address more targeted or complex self-care needs, including women's health and skin health offerings, such as skin healing and insect repellant |
Infant Formula | | Comprised of the infant formula product category, which includes nutrition products designed to meet the dietary needs of infants |
Our Oral Care product category and Other product category, which includes our Dermacosmetics business, are together disclosed as “All Other.” We have reflected this segment change in all historical periods presented.
In the first quarter of 2026, following changes to our segments, our CODM reevaluated and changed the primary measure utilized to evaluate segment profitability from segment operating income to segment adjusted operating income. We have reflected this change from segment operating income to segment adjusted operating income in all historical periods presented.
For each segment, the CODM uses this information to assist in evaluating underlying trends, to monitor budget and forecast versus actual results, to make investment decisions to allocate resources both in total, and between the segments, and to make key segment personnel decisions. Segment adjusted operating income is based on Operating income, excluding amortization expense, acquisition and integration-related charges and contingent consideration, impairment charges, Infant Formula remediation, (gain) loss on divestitures and brand sales, loss on debt extinguishment, unusual litigation, and restructuring charges and other termination benefits (referred to herein as “Segment operating income (loss)”), as the CODM excludes these items in assessing segment financial performance. General corporate/unallocated expenses, which include expenses related to treasury, legal operations, and certain other expenses are not allocated to the segments. In assessing segment performance and managing operations, the CODM reviews total inventory by segment but does not review segment assets in total, accordingly certain asset related disclosures are omitted.
The tables below show select financial measures by reporting segment(1) (in millions):
| | | | | | | | | | | |
| Three Months Ended |
Net Sales | March 28, 2026 | | March 29, 2025 |
Self Care | $ | 543.3 | | | $ | 614.3 | |
Specialty Care | 207.0 | | | 199.1 | |
Infant Formula | 89.7 | | | 87.8 | |
Reporting segment net sales | 840.0 | | | 901.2 | |
All Other | 129.2 | | | 142.7 | |
Total Consolidated net sales | $ | 969.2 | | | $ | 1,043.9 | |
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Note 17
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 28, 2026 |
| Self Care | | Specialty Care | | | | Infant Formula | | | | Reporting Segments Total |
Reporting segment net sales(2) | 543.3 | | | $ | 207.0 | | | | | $ | 89.7 | | | | | $ | 840.0 | |
| Adjusted cost of sales | 361.2 | | | 92.8 | | | | | 79.1 | | | | | |
Adjusted other expense items(3) | 113.7 | | | 58.9 | | | | | 18.1 | | | | | |
Segment operating income (loss) | $ | 68.5 | | | $ | 55.3 | | | | | $ | (7.4) | | | | | $ | 116.4 | |
| Reconciliation to Income from continuing operations before income taxes: | | | | |
All Other adjusted operating income | | | | 31.9 | |
Unallocated expense | | | | (35.4) | |
| Amortization expense related primarily to acquired intangible assets | | | | (54.5) | |
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Impairment charges(4) | | | | (330.8) | |
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Restructuring charges and other termination benefits | | | | (75.1) | |
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| Unusual litigation | | | | (16.6) | |
Other(5) | | | | (8.2) | |
Operating loss | | | | $ | (372.3) | |
| Interest expense, net | | | | 40.8 | |
| Other (income), net | | | | (6.0) | |
| Loss on extinguishment of debt | | | | | | | | | | | 1.4 | |
| Loss from continuing operations before taxes | | | | $ | (408.5) | |
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| Three Months Ended March 29, 2025 |
| Self Care | | Specialty Care | | | | Infant Formula | | Reporting Segments Total |
Reporting segment net sales(2) | 614.3 | | | $ | 199.1 | | | | | $ | 87.8 | | | $ | 901.2 | |
| Adjusted cost of sales | 388.3 | | | 82.1 | | | | | 55.2 | | | |
Adjusted other expense items(3) | 113.2 | | | 74.9 | | | | | 22.0 | | | |
Segment operating income | $ | 112.8 | | | $ | 42.1 | | | | | $ | 10.6 | | | $ | 165.5 | |
| Reconciliation to Income from continuing operations before income taxes: |
All Other adjusted operating income | | | | | | | | | 21.0 | |
Unallocated expense | | | | | | | | | (39.9) | |
| Amortization expense related primarily to acquired intangible assets | (55.0) | |
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Impairment charges(4) | (3.1) | |
| Infant formula remediation | (0.9) | |
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Restructuring charges and other termination benefits | (29.4) | |
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Unusual litigation | (8.9) | |
Other(5) | (2.4) | |
| Operating income | $ | 46.9 | |
| Interest expense, net | 39.0 | |
| Other (income), net | (0.4) | |
| Income from continuing operations before taxes | $ | 8.3 | |
(1) Amounts may not add or recalculate due to rounding.
(2) See table above for reconciliation to Consolidated net sales.
(3) Adjusted other expense items include distribution, research and development, and selling and administrative expenses.
(4) During the three months ended March 28, 2026, we determined the carrying value of our reporting units exceeded their estimated fair value and recorded a goodwill impairment charge of $330.8 million. During the three months ended March 29, 2025, we determined the carrying value of the Richard Bittner Business net assets held for sale exceeded their fair value less costs to sell, resulting in a total impairment charge of $3.1 million, inclusive of a goodwill impairment charge of $1.2 million.
(5) Other pre-tax adjustments impacting operating income for the three months ended March 28, 2026 includes $4.7 million of professional consulting fees for potential divestiture activity and $3.5 million of accelerated depreciation. Other pre-tax adjustments for the three months ended March 29, 2025 are related to professional consulting fees for potential divestiture activity.
Perrigo Company plc - Item 1
Note 17
The tables below show select financial measures by reporting segment(1) (in millions):
| | | | | | | | | | | | | |
Inventory | March 28, 2026 | | December 31, 2025 | | |
Self Care | $ | 700.9 | | | $ | 695.9 | | | |
Specialty Care | 138.4 | | | 146.1 | | | |
Infant Formula | 183.9 | | | 188.4 | | | |
All Other | 98.2 | | | 118.6 | | | |
Total inventory | $ | 1,121.4 | | | $ | 1,149.0 | | | |
| | | | | | | | | | | |
| Three Months Ended |
Depreciation | March 28, 2026 | | March 29, 2025 |
| Self Care | $ | 13.6 | | | $ | 15.3 | |
| Specialty Care | 3.2 | | | 3.9 | |
| Infant Formula | 7.7 | | | 3.9 | |
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| All Other | 4.5 | | | 1.7 | |
Total depreciation | $ | 28.9 | | | $ | 24.9 | |
(1) Amounts may not add or recalculate due to rounding.
Perrigo Company plc - Item 2
Executive Overview