Company: PRGO
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001585364-25-000056
Chunk: 54

Company: PERRIGO Co plc
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 1
Chunk 54
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. As a precaution, Perrigo has engaged alternate suppliers to help minimize a potential supply disruption. If the conflict spreads or materially escalates, or if the conflict leads to further volatility and uncertainty in financial markets or economic conditions, the impact on our business and results of operations could be material. For example, the recent escalation in military activity in the Red Sea region has the potential to disrupt supply chains and lead to further inflationary pressures which we are also continuing to monitor.

Foreign Exchange

We have both translation and transaction exposure to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to 1) the impact from input costs that are denominated in a currency other than the local reporting currency and 2) the revaluation of transaction-related working capital balances denominated in currencies other than the functional currency. Significant exchange rate fluctuations, especially in the Euro or the British Pound Sterling, have had, and could continue to have, a significant impact on our net sales, net earnings and cash flows.

RESULTS OF OPERATIONS

Currency Translation

Any currency translation effects described below represent estimates of the net differences between translation of foreign currency transactions into U.S. dollars for the three months ended March 29, 2025 at the average exchange rates for the reporting period and average exchange rates for the three months ended March 30, 2024. 

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Perrigo Company plc - Item 2Consolidated

CONSOLIDATED FINANCIAL RESULTS

 Three Months Ended(in millions, except percentages)March 29, 2025March 30, 2024Net sales$1,043.9 $1,082.1 Gross profit$392.3 $357.7 Gross profit %37.6 %33.1 %Operating income $46.9 $(55.2)Operating income %4.5 %(5.1)%

Net sales decreased $38.2 million, or 3.5%, due primarily to:

•$21.3 million decrease due to the prior year divestitures of the HRA Pharma Rare Diseases Business (the "Rare Diseases Business") and the Orion Laboratories Hospital & Specialty Business (the "Hospital & Specialty Business") and the sale of branded products within our CSCI segment;

•$12.6 million decrease from unfavorable foreign currency translation; and

•$4.3 million decrease