Company: PRGO
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001585364-25-000056
Chunk: 209

Company: PERRIGO Co plc
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 7
Chunk 209
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 months ended March 29, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.     OTHER INFORMATION 

ITEM 1.    LEGAL PROCEEDINGS 

Refer to Item 1. Note 15 and Item 1. Note 16 of the Notes to the Condensed Consolidated Financial Statements.

ITEM 1A.    RISK FACTORS

Our 2024 Form 10-K includes a detailed discussion of our risk factors. At the time of this filing, there have been no material changes to the risk factors that were included in the Form 10-K, other than the risk factor as described below. 

Global Risks 

Our business, financial condition, and results of operations are subject to risks arising from the international scope of our operations.

We manufacture, source raw materials, and sell our products in a number of countries. The percentage of our business outside the U.S. has been increasing. We are subject to risks associated with international manufacturing and sales, including changes in regulatory requirements. Refer to Item 1. Business - Government Regulations and Pricing, for changes to tax and import/export laws and trade and customs policies (including the enactment of tariffs on goods imported into the U.S., including but not limited to, goods imported from China), problems related to markets with different cultural norms or political systems, possible difficulties in enforcing agreements, longer payment cycles and shipping lead-times, difficulties obtaining export or import licenses, and imposition of withholding or other taxes.

Recently, the U.S government imposed new and additional tariffs on a significant number of countries and threatened to further increase the scope and amount of tariffs in the event of retaliatory countermeasures. The future of existing tariffs, and the possibility for new tariffs, including tariffs specifically targeting pharmaceuticals, under which many of our U.S. OTC self-care products may be classified, remains uncertain. Through the first quarter of fiscal year 2025, these new tariffs and trade policies have not had a significant impact on our results of operations. However, as currently in effect, the impact of these new tariffs is expected to materially increase the cost of goods for our products and materials sourced from other countries, particularly China. We expect that the tariffs, as currently in effect, will have a material impact on our U.S. business, particularly our U.S. Oral Care product category, as approximately 50% of procured goods in the category are currently sourced from China. As a result of these dynamic conditions