GET DAILY SIGNALSPerrigo (PRGO) Reports Q3 Earnings Beat Despite Revenue Miss
Key Takeaways
- Perrigo posted adjusted earnings per share (EPS) of $0.60, topping consensus estimates of roughly $0.51–$0.53.
- Net sales came in at about $989 million, down 5.2% year over year (YoY) and below the consensus estimate of approximately $1.01 billion.
- Core net sales declined 1.7% YoY, though the pace of decline improved sequentially for a third straight quarter.
- The company announced a deal to divest its Infant Formula business for up to $175 million as part of its ongoing portfolio simplification.
- Full-year 2026 core adjusted EPS guidance was trimmed to a range of $2.25 to $2.45, from $2.25 to $2.55 previously.
Why This Quarter Matters
Perrigo, a leading provider of consumer self-care and over-the-counter (OTC) health and wellness products, reported third-quarter 2026 results on November 4, 2026. The quarter serves as an important test of whether management’s “Three-S” restructuring plan—stabilize, streamline, and strengthen—is delivering lasting operational gains in a challenging consumer environment. I’m watching closely to see how the aggressive portfolio changes, including the planned Infant Formula divestiture, set up PRGO for higher-margin growth ahead. Sequential momentum in core sales and margins suggests cost savings and market-share gains may be helping offset headwinds in Europe and cautious retailer stocking before cough and cold season.
The Numbers Behind the Report
PRGO delivered adjusted diluted EPS of $0.60 for the third quarter of 2026, beating consensus estimates that ranged from about $0.51 to $0.53. Net sales totaled approximately $989 million, down 5.2% YoY and below the consensus estimate of roughly $1.01 billion. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Core net sales, which exclude the Infant Formula business and prior divestitures, declined 1.7% YoY, while core organic net sales fell 1.1%. Management highlighted a third consecutive quarter of sequential improvement, with the YoY core sales decline easing from 8.3% in the first quarter to 3.1% in the second and 1.7% in the third.
Profitability faced ongoing pressure. Core adjusted gross margin slipped 140 basis points to 37.9%, and core adjusted operating margin fell 210 basis points to 14.3%, due to lower volumes, an unfavorable mix from higher-margin European operations, and higher advertising spend. The Operational Enhancement Program added $19 million in savings for the quarter. PRGO also reduced its fiscal 2026 core adjusted EPS outlook to $2.25 to $2.45, from the prior $2.25 to $2.55 range, citing the divestiture, measured retailer inventory moves, and continued softness in Europe.
Market Reaction and Sentiment
Investor reaction reflected a split between the top and bottom lines. The EPS beat, supported by cost discipline and tariff recovery, was offset by the revenue shortfall and lowered full-year guidance. The Infant Formula divestiture was presented as a step toward a simpler, higher-margin profile and lower future capex, though it brings an expected $275 million to $375 million impairment in the fourth quarter. Focus remained on sequential operational gains and market-share wins in U.S. store-brand OTC and select European brands, tempered by European softness and inventory caution.
What to Watch Going Forward
Investors will monitor whether PRGO can maintain sequential core sales and margin improvement as external pressures ease. Early signs of better cough and cold trends were noted, yet retailers appear more measured on inventory, which may add near-term volatility to self-care volumes.
The Infant Formula divestiture stands out as a key catalyst. Beginning in the fourth quarter of 2026, the business will be reported as discontinued operations, allowing sharper focus on higher-return consumer self-care areas. The deal includes $40 million upfront cash and up to $135 million in contingent payments tied to net-sales milestones through 2030.
Cost trends stay relevant. The Operational Enhancement Program has delivered $42 million in savings year-to-date and remains on track for $60 million to $80 million in 2026, helping offset margin pressure from mix and advertising spend. Demand signals in the U.S. and Europe, e-commerce growth (now about 22% of U.S. volume), and continued share performance in store-brand OTC and brands such as Opill, ellaOne, Compeed, and Jungle Formula will indicate whether restructuring is producing sustainable, higher-quality growth.
Tools That Support My Research
When evaluating reports like this one, I often turn to Tickeron’s AI Screener to quickly filter peers and spot relevant technical or fundamental signals. It streamlines the process of comparing performance across the sector and helps surface ideas worth closer review without hours of manual work. This kind of AI-assisted scanning fits naturally into my workflow for earnings analysis and ongoing monitoring.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
PRGO's RSI Indicator peaks and leaves overbought zone
The 10-day RSI Oscillator for PRGO moved out of overbought territory on October 19, 2026. This could be a sign that the stock is shifting from an upward trend to a downward trend. Traders may want to look at selling the stock or buying put options. Tickeron's A.I.dvisor looked at 30 instances where the indicator moved out of the overbought zone. In 24 of the 30 cases the stock moved lower in the days that followed. This puts the odds of a move down at 80%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 28, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on PRGO as a result. In 51 of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 59%.
The Moving Average Convergence Divergence Histogram (MACD) for PRGO turned negative on October 26, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 41 similar instances when the indicator turned negative. In 26 of the 41 cases the stock turned lower in the days that followed. This puts the odds of success at 63%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PRGO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 67%.
PRGO broke above its upper Bollinger Band on October 15, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 40 of 50 cases where PRGO's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 80%.
Following a +4.26% 3-day Advance, the price is estimated to grow further. Considering data from situations where PRGO advanced for three days, in 179 of 281 cases, the price rose further within the following month. The odds of a continued upward trend are 64%.
The Aroon Indicator entered an Uptrend today. In 126 of 204 cases where PRGO Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 62%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 11 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.873) is normal, around the industry mean (7.659). P/E Ratio (-1.264) is within average values for comparable stocks, (0.330). Projected Growth (PEG Ratio) (1.142) is also within normal values, averaging (2.202). Dividend Yield (0.073) settles around the average of (0.062) among similar stocks. P/S Ratio (0.454) is also within normal values, averaging (181.047).
The Tickeron Price Growth Rating for this company is 40 (best 1 - 100 worst), indicating steady price growth. PRGO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 90 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 98 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PRGO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock worse than average.
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General Information
a manufacturer of pharmaceutical products
Industry PharmaceuticalsGeneric
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