Company: PRGO
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001585364-25-000156
Chunk: 225

Company: PERRIGO Co plc
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 15
Chunk 225
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 6% of total Perrigo roles. Refer to Item 1. Note 15 for further details on restructuring charges.

Nutrition Network Optimization; Strategic Review

In 2025, Perrigo initiated the Nutrition Network Optimization project to optimize our infant formula manufacturing footprint, upgrade packaging capabilities, harmonize quality processes, and enhance our research and development capabilities. On November 5, 2025, we announced a strategic review of our infant formula business. 

The review will assess a full range of alternatives and is aligned with Perrigo’s ‘Three‑S’ (Stabilize, Streamline, Strengthen) plan and reflects our commitment to disciplined capital allocation and supporting improved return on invested capital and total shareholder return. It will focus on a combination of accelerating cash flows and reassessing the previously announced investment in this business of $240 million, while optimizing portfolio impact and management focus. 

For further details on our restructuring charges related to the strategic review, refer to Item 1. Note 15.

Market Factors and Trends 

Macroeconomic Uncertainty

Current macroeconomic conditions remain dynamic, including impacts from inflation and interest rates, volatile changes in foreign currency exchange rates, tariffs, political unrest and uncertainty and legislative and regulatory changes. Any causes of market size contraction could reduce our sales or erode our operating margin and consequently reduce our net earnings and cash flows. As a result of these dynamic conditions and uncertainties, we have modified, and may further modify, our operations and strategic initiatives, including by adjusting our investment priorities, reallocating resources, or delaying specific initiatives, such as deferring capital expenditures on the Nutrition Network Optimization project and seeking further working capital improvements.

Current uncertainties arising from increased tariffs on imported products could have an adverse effect on our Company. In 2025, the U.S. government announced new or additional tariffs on products imported from many countries and individualized "reciprocal" tariffs on countries with which the U.S. has the largest trade deficits. While some tariffs have become effective, others have been temporarily suspended or permanently repealed and the U.S. government has announced trade agreements with various governments and additional tariffs on other products. As a result, there continues to be significant volatility and uncertainty regarding the scope, timing, implementation and effective rates of tariffs.

Based on current assessments, excluding any potential impact from pharmaceutical tariffs that may cover ingredients used in the manufacturing of OTC products and recently announced potential changes to tariffs on items sourced from China, we estimate a gross increase to global cost of goods sold in 2025 beginning in the