Perrigo Co PLC (NYSE:PRGO) has reported a 2.2% increase in net sales to $1.1 billion for Q3 2023, marking the fifth straight quarter of double-digit adjusted growth in gross profit, operating income, and earnings per share (EPS). This comes despite a slight dip of 1.2% in organic net sales due to SKU prioritization and HRA transitions.
The company's gross and operating margins have seen yearly and sequential expansion, with GAAP gross margin increasing by 360 basis points to reach 36.6%. Adjusted gross margin rose by 300 basis points year-over-year and 80 basis points from Q2, settling at 39.5%.
The adjusted diluted EPS witnessed a growth of 14.3% from the same quarter last year. Meanwhile, operating cash flow reached $125 million, leading to a conversion rate of 143%. The reported EPS was $0.11, a significant improvement from the $(0.39) loss recorded in the same quarter last year. The adjusted diluted EPS was $0.64, up from $0.56.
Year-to-date net sales for 2023 amounted to $3.5 billion, reflecting a 6.1% rise over the previous year. The year-to-date GAAP gross margin stood at 35.8%, while the adjusted diluted EPS came in at $1.72, marking a substantial increase of 30.3% from the prior year.
Patrick Lockwood-Taylor, President and CEO of Perrigo, attributed this strong performance to robust business fundamentals across the global portfolio, notwithstanding volatility in the infant formula sector.
Looking ahead, Perrigo's fiscal outlook for 2023 projects an organic net sales growth of between 1.0%-3.0% and a total net sales growth of 4.0%-6.0%. The company also expects an adjusted diluted EPS range of $2.50-$2.60.
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