Earnings call transcript Q1 2023

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Operator

Good morning and welcome to the Perrigo First Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode.

[Operator instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brad Joseph, Vice President of Investor Relations and Corporate Communications. ahead. go Please

Brad Joseph

this Good available quarter Anthony. all and to perrigo.com for we welcome a earnings of Thank and website. the release earnings morning, Investors conference first presentation issued release our XXXX to discussion you A call. Perrigo’s copy chance the are you today’s review everyone morning. within I had of hope section

CFO, call President and Eduardo and Bezerra. are Kessler today’s Joining Murray CEO,

forward-looking language certain Please I’d and press call, statements morning. remind participants this the like information refer in earlier everyone this important make to to during investors that will and regarding our statements. for shareholders issued Safe release Harbor these

few items we A quick start. before

not all and to the results discussed from stated, was a divested presented Rx unless business, continuing for sale. financial prior any They operations include as discontinued which contributions on First, do accounted its are operations basis.

the All in versus comparable to exchange organic year's constant currency in applying measurements by in Second, both rates statements. remove financial of prior divestitures, and the used excludes the comments related growth prior year impact comparable periods. the currency acquisitions, currency the translation

and See solely appendix third, expressly discussion otherwise results, for non-GAAP noted. measures of reconciliations And except Murray’s additional as non-GAAP on all focus will details financial for the presented.

invaluable On share And Murray, have behalf retirement. you his for Murray during leadership lastly, your and success. path on appreciation and deep felt company thank mentorship to I on been of congratulations his you. has a want long-term for my set tenure warm a at and shareholders, this Perrigo

to Murray. to pleasure is over last call the for Now it the my time, turn

call with I'd the over Murray. to to And that, like turn

Murray Kessler

virtual of a attended provided a amount critically feedback strategy has details this accelerate. everyone important hosted are Perrigo shared day and shareholders us what our how for Brad generate the end optimize company. for this my been we of of the My morning. team thank we value and you on Many day joining next event This since the of specifics where positive. the significant investor at I our Thank phase of calling joining we received overwhelmingly to second February for was you likely we’ve investor and you believe and was expect we

four of Now squarely self-care quarter day the the initiatives results. investor first made into after a consistent transforming during focussed the and of many on management delivery meaningful end company that years operational at Perrigo consumer To is execution on progress team we XXXX. discussed of of

Good the integration brand both. the acquisitions on Start already significant and realizing gateway and with We’re track are HRA from for benefits

We exciting are I stages, seen reinvention just on a some more progressing this results have in expected faster and on in chain supply moment. the early than

FDA consistent a presentations contraceptive. Underpinnng progress after volatility the And our starting business I’m general health and results unprecedented seeing that advisory strategic initiatives, team predictable more business our that is my potential Perrigo’s proud it’s switch women’s from echo the comments years Rx-to-OTC the across are committee of To at today first-in-class financial for of are say to Opill fundamentals. reviews, oral reportedly business we strong become again. and two managers our

market and acquisitions remain and double-digit in global strong. demand meaningful and achieved to consumer business driven share quarter and line, That Perrigo base a first margin top the and manifested growth on fundamentals as both bottom the predictability where by growth retained itself grow expansion

now the this company by assessment the We overhang resolving on last also entire weeks remaining of announced of Athena required two within elimination tax largest assessment dismissed. completely was XXXX, April No and the the is payment $XXX the tax million. successful

thesis. IRS. assessment tax the and desk dramatically the in rate interest I the sell have investment reduced uncertainty cleared just also with Perrigo We the now

turbocharging only touched revised savings higher but financial direct leverage model, remain distributor our we just I on results, deliver not on-going the Perrigo's which across delivering the conversion complete. synergy HRA track our acquisitions will are We HRA, portfolio. are sales from are Perrigo once As cost on, significant In creating targets. benefits greater into also on recent with

on there associated one-time $XX returning As previous is distributors. I conference from inventory discussed approximate income operating calls, in to an impact XXXX million with

Of impacted this quarter in line annual EPS and expected. first estimate, $XX $X.XX million top the as

on as is Importantly, sales combine now leverage business we're greater legacy portfolio. our such ellaOne force strong Perrigo's European pan-European brand existing with able more Compeed CSCI realizing to as and our regional brands

are of integration also The gateway track. the brand GoodStart on infant the and formula facility

currently continuing to services to insourcing a from the value-based are increased this capacity despite voluntary and transition of provide recall We supply in on much-needed leverage provided by infant Nestle, we're progressing formulas. quarter, facility

few More we by supply Within in beginning our result initiative, strategy, our service of at increased remove a our with formula of positive Association through chain which the Chain Perrigo on infant manufacturing the track SKUs in on to or that Drug nearly optimization operations forward capacity complexity X,XXX portfolio standardization the XXXX. and up efficiencies NACDS, them with are will minutes. much-needed We customers increase free week's winning conversations reinvention from in operating to last had customer levels Stores, partnering National look conference of system. to will through

cost-effective level. work called an enhanced the in is Perrigo the pilot at Redzone, We provides integral system which the lines monitoring equipment Redzone operating management overall three solution program provide the be using piloted system The a part QX. effectiveness, system. a a manufacturing line real-time globe software of It and OEE. We to information also on our will completed across

the are expectations rolling results, These Redzone productivity all and and cost. sites. begun increased achieved across process three above our global out manufacturing we've exciting of truly at our a lower-than-expected All

control Advisory needs their effective and allowing to the FDA's FDA of contraceptive and meeting of switch people to is approval Committee take commitment in space. women all potential to birth our the for the while women to health today access Opill. earlier, terms. epitomizes day U.S., increase on mentioned I the control would important safe an women's The As Opill-OTC discuss begins it This their of and

organizations While, the oral application, scrutinizing have support the XX Opill. be year contraception. to over voicing should of independent XXXX, are access ready women FDA In will this there

reminder, a is non-binding. FDA As Panel the vote Advisory

the to render expect on later a decision year. approval We this agency

respectively. we X.X and volume a quarter grew QX at as currency XX%. unfavorable tremendous in financial quarter was initiatives from impacts sales points Looking net portfolio despite X.X%, had in results, net and and X.X%, constant our voluntary grew the sales two of grew X.X Organic X%. optimization importantly, CSCA, Pricing recalls percentage

attributed diluted impressive EPS with acquisitions. margin constant business basis. currency plus XX%, higher XX% adjusted grew Perrigo the Gross by on nearly driven margin and Year-over-year or basis by an improved legacy half points, other XXX half the a to

the Success in quarter broad-based. was

at and robust by While global solid, remained in a demand cold season. strong part a consumption driven high, European four-year consumer very is is

with XX% Our share versus in ago a takeaway Compeed brand up demand strong year the continues gains, consumer and to see quarter.

insect and positive such market year, last continuing are the drivers our recover CSCI as anti-parasites share of gaining trends oral logistics areas, experienced the and Other care repellents, growth. categories U.S., businesses and chain and positive. supply are sales were In very in consumption dynamics growing to and from

compete number and and distribution NRT robust XX% digestive new in OTC, Perrigo gained U.S. in two driven a products in. we share we grew the the categories, by And the consumption health categories gains. care share recaptured in and higher position in Oral quarter, margin

in points. X.X% was the a OTC U.S. XX%, note, basis up organic quarter Of U.S. gross up OTC year and margin growth versus was ago, XXX

U.S. category. the currency of Looking of segments at our organically. is but is XX% business, top constant quarter, Many and we every in they nearly more the line revenues, XX% growth our grew in its detail, product stride. U.S. business bit so are both really a in hitting based, which achieved The nearly toward CSCI, strong XX% gravitate investors

The strategic come was due cough, strong high noted HRA, cold, brands, from stickiness and increases, the price together from greater of the leverage EU gains, CSCI consumption beautifully. strong really has incidences and I to HRA, our Pan-European brands. of the share the The business flu, just

again SKU experienced and Rationalization purposely consumer products We solid divestitures. the Program for low-margin when from especially demand from also in discontinued our you once adjust U.S.,

business than QX customers unusual. shipments see the that inventories grew that's a in below something unfavorable total, SKU levels during impact basis as not reduced quarter, fourth from quarter in OTC greater we replenished the U.S. often Our to were including Rationalization. as XXXX they the point noting normal worth customers X% and were it's consumption in in XXX It's exited and

and category the our acquisition which discussed. Compeed movements which other Minoxidil in the and the skin the notable capacity care, I just HRA, addition benefited from increased hair manufacturing which of health, the Mederma women's the addition from Other care, brands, U.S., benefited LXX in of an products for from oral of brands quarter regrowth and included

the in CSCA an quarter, our Net by in on GoodStart business, Infant Contract driven minute and Formula the sales growth from Let's strong spend a grew million $XX XX% business. in Acquisition. sales the Nutrition additional

As this shortage. recall is Formula. an includes a a GoodStart benefited year-ago impact sales infant SoothePro $X very $XX growth against million compared due strong formula GoodStart the period The Acquisition a the from from of to Gerber Infant unfavorable benefited that of the reminder, million of certain voluntary lots

our here. to into manufacturing has more powdered the cost and members safety issued of formula. formula. letter of and to Let assist infant little strategy infant improving This FDA formula March letter detail significant in go a a impact industry In national a the XXXX, to on a me produce microbiological released infant

one, Of for hold modernize formula new to we further processes course, refinements evolving two, are, response to to supports manufacturing Perrigo further including and food and significant regulatory infrastructure sanitation our to promote infant procedures, safety and, FDA babies. nutrition and procedures, adjustments strategy and mission In and its modifying times, investments evaluating ensure quality FDA's expectations, our more. to in making

new will even cost offset per price brands. XX% negatively a to these significantly approximate national substantial cost infant increase, deliver price requirements as the As the Perrigo we said, will raise products compared that with the impact actions formula. of consumers after savings ounce increase. producing But will regulatory of anticipate and an store-brand these supply The I be

much transformed future. say has together. past Let me enough pull years all the how and about Perrigo excited over I our I this few can't am how

and continue Our market strong fundamentals we getting are stronger to share. as win

big accretive acquisitions impact. strategic a are Our having

years. Our optimize three outsized expanding, and to the our continue we next over gross and operations strategic to investments is drive accelerate growth our margin

discuss before turn I'll I'll the to Q&A. over the end and more to our wrap call Eduardo? come back to CFO in in that, financials With detail, up

Eduardo Bezerra

Thank you, morning, Murray, everyone. good and

color morning's guidance. I some our provide flow our wrap then drivers expansion, cash of our with our XXXX and up and margin this highlight For walk metrics, QX call, balance financial sheet results, will on the gross through

million, $XX GAAP-to-non-GAAP or per earnings year the was for of quarter. diluted per our million was the versus and prior of $X per Adjusted per diluted quarter, share share with loss a adjusted $X.XX first $X.XX the GAAP share loss summary, net Starting $X.XX share. Company reported a income in

were P&L primarily few related A adjustments HRA charges million $XX quarter integration-related reinvention million, and the $X of billion, and non-GAAP our chain acquisition totaling to the mainly of facility, million, to $X program. amortization expenses expenses supply related gateway pre-tax to restructuring of and $XX

the comments already grew expanding Full press be provided non-GAAP profit release. previous can numbers, margin Murray quarter, XXX attached point From the this million, be versus details $XX reconciliation basis will that morning's the quarter. top-line in my basis this Since points found an in begin details results, unless will stated percentages gross which XX.X% profit, dollar year margins to consolidated for adjusted our table basis otherwise. gross with or points, our I all on and forward,

distribution Growth flow-through, recalls, was the voluntary two impact unfavorable and by strategic impact gateway or the transition, by HRA offset business. currency income $XX acquisitions, from the actions, and offset XX%, facility of pricing were favorable of due mix, increased translation. profit operating which partially driven partially gross HRA expenses the by inflation, Operating divested net to by higher the which of volume favorable inclusion was million, driven and

associated debt Interest closed which the and HRA other expenses both refinancing acquisition, last year's QX. in to million with due increased $XX

points to basis previous changes also versus earnings. income benefit rate in our in jurisdictional of We year tax XXX saw mix a due of

or these bottom adjusted on an year, at basis. translated last line, factors improvement the XX% currency XX% the compared first quarter, of constant an Looking DPS $X.XX into a impressive in increase to

gateway driven points Looking through the business by equal an margin slide improvement first XXX and Perrigo of acquisitions. gross both the basis legacy business was between This split was XX, at achieved and HRA segments. quarter

Within inflation. products, that business acquisitions, impressive our mix CSCA, offset basis new driven by favorable OTC actions pricing XXX in gross points benefits on and margin strategic an grew products from existing and

rebounding margin is actions, from oral As pricing our favorable supply mentioned care accomplished the a gross Murray basis chain levels, year increase and dynamics improved XXX in driven by U.S. logistic service last points earlier, experienced mix. strategic business and customer and

prior CSCA's impact to led basis two recalls profit expansion basis a the the was HRA from gross the factors of in acquisition pricing including more versus points than These voluntary year XXX inflation margin The expansion basis increases, driven XXX quarter. in in the margin, of contributions XXX of points points an impact FCI and unfavorable gross by offset which strategic from quarter.

transition. The points gross XX and the recalls XXX gross transition. together distribution from expansion basis last from of points included margin impact two basis an these points margin a XXX combined impact HRA the expanded distribution basis year, unfavorable voluntary Perrigo, versus for the including Bringing total headwind HRA the

both margin expansion achieved also We quarter. segments in the operating across

XXX gross were expanded by margin the gateway I and mainly the of just due partially through operating expenses, flow acquisitions our brands. to in to compared HRA core year points higher and the offset and promotion related profit to prior facility the discussed as investments basis factors operating Perrigo advertising

on from the at the million quarter, quarter of million end end moving first the hand $XXX year. down to fourth was at of the flow. last Now Cash $XXX cash on the

been diversify U.S. Europe, haven't our amongst recent We institutions the we to and impacted actions management low-risk instability proactively have flow institutions. by financial cash taken in financial and

expect monitor in similar year, flow quarter to these $XX our Operating to we to the for for million, continue with be closely. will We last the developments conversion cash of which phasing year. a XX% line was

we from and In restructuring a heaviest million employee quarter, the driven incentives. the primarily experience cash in by acquisitions operating first expenses. As reminder, outflows flow included typically quarter, annual of cash the related $XX outflows

also shareholders capital quarter. million our through $XX first invested We dividends million $XX expenditures in in the to and returned

months for full projecting X.X EBITDA, X.X from the still Also, conversion end the cash year. at times adjust net we're the XX the was ahead, to income leverage times over adjusted Looking our operating flow XXX% net trailing XXXX. of down

momentum our formula reaffirming continued Totally pricing offset which are costs actions XXXX we business coming our discussed, CSCA our these in in QX, Murray infant as business costs. to guidance, strong higher with through includes,

and direct EPS This the QX. in news faster the we minimal from distribution we not the to making slightly expect QX to from HRA from is means progress provide are quarter transitions. continue QX shifted has we QX distributor similar planned updates and sales timing of updates share originally and to Additionally, it per $X.XX returns Perrigo, now impact will time. transition provide the be sales unfavorable transitions than in HRA continue to as -- impacting only and going we impact to does good impact our in to and change on total estimated each these the And to $X.XX with earnings -- $X.XX is

weighting Summing Investor we February be our at half expect EPS second higher this up, now our than discussed Day. slightly to

America the Latin end quarter. QX, will anniversary of second ScarAway the during and we investors HRA we divestitures are reminder, in acquisition a and the As at

year, Since to challenges. I by our supply environment. joining navigate overcome our adapt a record to ability impressed team inflation dynamic in to been of last the repeatedly the chain continues have and in From logistics company numerous and issues face team's

now the cash us. is also first I'm with This company. through company. to solid are I overhang remaining impact joined these different. on a tax billion say all we and pleased that only overhang a almost of my financial no performance, the On the extremely attention behind eliminated of quarter This Perrigo, $X top when minor Nearly to

on towards and the business momentum continue to year to rest forward look forward a substantial in I we delivering initiatives, strategic this of our the progress growth environment. strengthening through our dynamic make delivering as carrying

truly on that Before operating here we a over I you you turn you has The X efforts I be tremendous retirement, all in Perrigo tenure to behalf the Murray. our has committee, drive strategy forward. entire with call for past would over, excited set just We our transformation say on your could the the led have path success, a of to pleasure you and during thank not been years. like and working wish the best it that more for your

you, Murray, Now for closing to back your remarks.

Murray Kessler

Eduardo. before retirement you, to my Thank really on move few comments Q&A. announcement A on kind. That's we

value almost to place M&A of assignments exciting As the you to in to overhang path XX the reconfigure ago company's know, career. that future. lead the self-care transactions the I near a one of to strategic billion joined company's portfolio, years $X the elimination from company create company been to care X put transformation Perrigo my transformation of the From has for Leading a complete of consumer legal accidently the the most health company.

in am happened what pandemic, team invasion chain I cost my the that of global of The of a this proud all Russian has makes and supply growing the pieces businesses accomplished. the fact We've to face the input Perrigo in over support the highest and is consumer beginning Board the revenues line global its Ukraine disruption, in the sweeter. are in place. added that All inflation top billion since the now of decades transformation much our robustly. transformation. $X.X

clear the growth. the strong a to at group. continue place growing think nearly line. and strategic and its company its first growing In for our going quarter, up the long-term path top is and it's that the bottom in is or leverage and of a produce at Perrigo consumer set to to margins forward plan sustained we top do has peer were It expanding right I has

for plan for to Perrigo for investors. I have time the Perrigo tremendous believe values to a years someone drive future bright collectively right we and create tremendous value relentlessly set and -- reins strategic to our to execution that take the it's truly of up else Now the for come.

strong despite be a peer Perrigo a of of Perrigo and I trade will very Remember, at XX% success portion even my to be discount and a intend the to will retiring the I large versus that's to shareholder And tight though its individual continue why sell results, company. continues diversify, Holdings group. almost to I'll remain to of Perrigo

on target smooth date successor the ensuring with and the I'm set working the of a of Board a and end transition. I've retirement July, identifying

importantly, I'd who supported and have the Perrigo employees to most thank Lastly the through me transformation. like

you. lead amazing, honor You it's and are truly to an been

And with questions. now that, take operator, we'll

Operator

question first Our from Instructions] [Operator Genuity. will Canaccord Anderson Susan with come

go now may You ahead.

Susan Anderson

for on your and good Hi, retirement. questions Murray Thanks my congratulations taking morning.

You've up setting success. great job done a the future company for

Murray Kessler

Thank you morning. Susan and good

Susan Anderson

Yes.

I to So first maybe a bit wanted just points. the margin, the drill XXX on down little gross basis

I the just recalls the with of maybe And between maybe much how then infant bit little guess, more think XXX drivers give mix, I you that the on of the etcetera. rest color said if HRA bips you was a the from could distributor. currency, formula? pricing, also, there

Murray Kessler

Eduardo first relative which the take you talk [indiscernible] Okay. Yes, can break part. individual across margin just the businesses to the up why the want then and I don't to drivers. of gross sort the I and

from margin gross on was gross points. year CSCA, the XXX yes, So last this year to margin

from to I think than So if I was went up OTC was XXX, are margin. XXX. it, it so parts gross -- it you XX% more XX% look last important up year me, a at the had excuse

the quarter actually a basis went Care first XXX, quarter, on had a significant fourth recall. mean, XX.X% the XXX a you bigger had increase. big from it that to Oral XX.X%, decline was has to the CSCI related but even point I and to and Nutrition had from that. hit up decline a

X from purposefully just it's significantly we but Eduardo and can hits It $XX our growth our with of force it. the progressing So own these sales every expanded of quantify of to recall was hit had you HRA on margin expected, had part covered distributor and as moving strong. and or standpoint, not million recalls then $X.XX the you business a roughly business that from so

and all have not businesses programs working or continue are some our the will driven are want to clear grow of be highest pricing to kind beautifully. They're are growing in margin especially that in but expand time, fastest want margin I But the you over things recovery, very we the they company. as that our

get your Go Now to Eduardo will on ahead. specifics the drivers.

Eduardo Bezerra

Yes.

there, specifically talking So Susan.

around as OTC about basis we points. impact points year, on we And HRA to between XX announced the the related And last transition had the about So XX that there. on to basis we also GoodStart also points there. XX recall inventory compared basis had

mix those that flip points points. cost And points was the about side, on impact more of about inflation XXX had and basis about than a basis pricing so basis and and And on XXX offset had we positive impact input the combined XXX volume positively.

Susan Anderson

what long your it terms And and prices, margin I the the you the this on how Great. guys of an be there this in actually correct? across will to it then also, label to changes business, the then is two was category. of Okay. formula all does the that FDA? in business, I and get expect and pricing the how the helpful infant sales And Thanks That do you idea really I rest pressure would And you timing the be increase from for much guess just with impact, helpful. a on stock. will of guess, year be private sounds and or details. assume will then do back have take to like sales raising

Murray Kessler

a Yes. of lot questions. were Those

every if get let's So just let again. go little ask me here don't just piece back of turn it it, I over bit. But to a

shortages. was sort a very shock of important really I'm system. letter manufacturing for the whoever it's the it that and the of intended. fully this impact understands sure output to and to not of industry think time during It's there when say wrote period a especially are I well

very control letter earlier, there did the not have to If first the this during Perrigo clear break to recall. been no X prior been out, want quarter. I coming system quality had would weeks down be But that it

place been product much variation the if of would recall. for decades, have So not control a quality away, place had measures any in to etcetera, in how been that you there throw get that were

Okay?

have to talking it given happened others what admirable, year an from has that's about last tried very to up and another FDA and Congress you're now. but safety The raise level, pressure and what input,

So including full product, on sanitizations the will be have of be okay? by them, and negative sales the shutdowns, but pricing, -- of will all input we a more plant there'll it that offset

lose going a as will little see of you it bit what pricing volume, formula gain just still to you're in the and bit we our more in on making a additional So be original it cost, little an infant business, then plan back loaded.

Pricing here, we business is just couple away relative the lower don't that be that We're happens price and a on will ounces. this necessary cheaper cost And about pricing absolute but pricing that on XX -- we're competition. We higher to more the productivity. business not brand -- -- give offset so to to pricing it our an XX% do store value unit. about be will after

So per at the XX% pricing. after actually discount on a ounce a cost be basis, we'll

conference. make understood spent addressing biggest we they was X all NACDS, expanding a they margins this just were be just of and we to to They there our price Customers have margin, and I change. on That this. produce We weren't understood days that a increases. hate that this. able -- regulatory understood literally that change

case, think that But pricing value well supported. a I'm be through. Nobody necessary when this sell I and in we'll So very not will worried about absolutely competitor. it you're that. it's likes

your all questions. answered I yes, think So I've

Susan Anderson

has also there had back And guess your you are and then I your really retail. Thanks. stock just categories certain at inventory ability then quick more on of? quickly? in levels get to great. That's And Yes. then how

Murray Kessler

fully at of even heard out to was lot we We're there making We're first stock. I've a category. high. before low little shipped could inventories X.X in yet. of I our but weeks that's not for X level. progress, or And on that more inventories us That's inventory the -- quarter, on than still own we're of I retail average case Depends categories NACDS, a heard little they're the bit of where build a heard a the and be in -- but at week -- the begin safety out consumed during we back we

right facilities. company, it's doing manufacturing our really listen, is So productivity in for the the now beautifully

at season have again, is gold. terms had where running inventories We're off down running we are through because, we to build last record that's year, We getting we And be again season which of inventories. liquids right an issues and cost back record call an levels area especially two the the illness supposed liquids or our in at the elevated stock levels, our season in are past on way and concern X the cough Based was for business be over year. on we pediatric back the full and of safety going with months. should trending X trackers cold next summer,

other comply. and will quality inventories can holds nutrition some time is to The regulatory basis, in sanitization It business, order as going be a longer get is some take before said, back. nutrition this working I and plant to we through new there's full guidance. It with additional

end a I for XX time been last now been but that's an on don't extended. it, the challenge So a in probably I yet. can't it's sight put months see

good are on But safety facilities. is news the the back So when in other we did buy a Nutrition. stock position we fully

product And with. have We're capacity. making investments. are not lot we work those million more within So off to X pounds a we we those backing an And should another additional have investments. of year,

to we're the back the most again. service cough/cold, recent the Other think up in back So in in nutrition levels. not And -- service too. weeks U.S. on we're of I into the a rest in business, than 'XXs the We're in 'XXs concern back are Europe. and the levels

So everything is going in the right direction.

Susan Anderson

market? to to on could the the on will the to is on Opill. just that share? this color then launch week's that Curious, in Okay. going basically add of give around opportunity just the And take some the ask how impact X if it AdCom And could P&L? the you then also, Great. you any market to line Or is Thanks. to and on U.S., it just if give time your approved, any this? thoughts about could around And think more I they're thoughts going

Murray Kessler

few -- not Day, Well, your -- but I Investor our knows in guidance we've I think I think given year next the of it so any not modeling. is read in it years million upside, I in change you're is at $XXX it's everybody talking it's note, revenues. over our only current it's and because giving one estimate in it the and not It's of think been -- roughly a a birth big having control, and we've this

months review And a next FDA once a it. the decision X that panel into about got think the by say they I advisory or data or the the and what time X for to position, to make has them

of the talking to a date decisions beginning of when have depends and those. in don't yet. It how end set their FDA think come we I they of You're any next year. implications the the very year,

But to next job really believe is But this gets believe this women's And it on we numbers approved is for There we of have safety product how about which that there, philosophically, many idea big this the a though, we're It's it's when And FDA our comes do. see taken they're this And health. out. like and through. [indiscernible] will year, and again, pushback -- not whole, get But period. lot all approved. excited in XXXXs. we'll company, time in testifying. the this. this hopefully, the data it will a Ultimately, their be that's upside. the is on And market has year. since been this approve what a There's we is in a supposed of application should

Susan Anderson

luck Good rest Great. of Thanks the so much. year. the

Operator

Schott next will with Our come from question JPMorgan. Chris

may go You ahead. now

Ethan Brown

my on year bit. Chris growth do This the then a question. rest you I update talked sales for about with Schott. how we this first is Ethan of for and infant as the move past But shortages, Brown on just FDA taking about nutritional think the quarter off, well? disruption segment, you the already for Thanks guess, as the the this formula

Murray Kessler

once as challenges with stripped running facility, had March was no year. flow, April and were bit we huge had our -- way back Okay. that, our equipment, Well, year the Vermont safety little remember, the actually safety on -- year, really older struggled base we let's of it were what half in And we our the spikes. March keeping last on and have sauce, progressed, start and but last February, business, April. pushed our and then up after we of we business stock the that, A and

not how demand, It's question. the a pounds how dollar. So millions facility we're had think this going it can of but a just unmet regulatory when be not much Nestle, be into It's giving even buying we guidance going new tens to the a of make can it's is Nestle much demand make here. in to will like lumpy, we and bit under I a of and growth of I a And we estimates question with ton year. back went think of we be the

in I front So have don't the you now, forecast Brad, give of later. right those can me numbers

half off year, of will the of in we standpoint, depressed not plan. a the bit was back half last it. bumped flow get year. sort back the of because But backing the from middle a the of It are But up pricing little

onward rates July formula, not driving nutrition call numbers. it, there June, from, year of end May, So in we'll growth the until our infant big is the are which some

Ethan Brown

price then some through year? outside Thank of further on the planned can move XQ you. the do pricing pricing great. actions as we results nutritional we opportunities segment, And think most reflect the or of That's about

Murray Kessler

when talking at I'm traditional a -- took you U.S. X-part almost in look answer, company. business customers on increases midyear. And We on is, is with It of first we in us Well, But store the because our -- And the lagged have national is here, in to any that only CPG similar the it's international touch were brands the most second price the branded companies didn't negotiate it the to beginning to is into you right? brands. U.S., a the our U.S. midyear. go

you'll to I when to cost, most whole start year still the those. can And great get then through done. some lap a is So on you're crisis to, get quarter strong of need pretty that second suspect, benefit, The in to we news this we going learned have of we of would price ours. this for

going not right now. answer I'm question to So your

go go I pricing I a CEO and You sometimes I to to sometimes I me and -- and products have cost toolbox, sometimes and pay go to to as new innovation.

chain on numbers. sometimes right And the of delivering I credibility Perrigo to look to the and at now guidance. at on sometimes and to sense discount to about go I opportunities to go believe we'll most sitting its metrics structure, and all a reinvention make XX% sometimes valuation on that I I supply truly the continue where capital M&A but is it go terms at which deliver is in

try So lovely we'll me from for perform including consistently promises that, to, lever any deliver And I year. think the have use we to everybody my is retirement. and made and benefit going then the to to we

Ethan Brown

X maybe X keep on you you. talk last private seeing versus for national me. the about there? in trends and you're mind then notable current the Thank macroeconomic label environment to Can just anything given brands, And the

Murray Kessler

I in Yes. is here. declining. Eduardo see and But perhaps feel free their volumes what jump growing to volumes our

margins dollar more I with You good market on That's good competitive discount versus gross much of want brand and to. a as swing share the with have our price as long trading then because don't I national advantage. don't if the have and to customers. down see to We over grow partnership don't want haul pricing. the they're our aggressive

in national hand, situation to be see But you concessions. making So other most than price more on we aggressively clearly, a we having have brands, priced were us. where used etcetera, the

price when first gotten and to growth necessary. we've to ability now for Now stabilization our

down volume. As result share Meaning traded. of consumers are we market gaining a all that, are in of

Operator

come with question from Biolsi Our Hedgeye. [Operator Instructions] next Daniel will

now may go ahead. You

Daniel Biolsi

Board. Thank the you you're take I well-earned retiring Murray, on from your it, also retirement,

Murray Kessler

happens, automatically That yes. Correct.

Daniel Biolsi

what quantify wondering upper And like just I the if if it you shortage on Okay. sales then that impact consider lost respiratory delayed? segment, the product was you was or CSCA could was? it And

Murray Kessler

have list. for think, the that We saw of, I had again. have they're we to lost that but trying now, had we this. than $XX doubled XX% we about do at million about sales. number you a just I shipped forecast Brad, more that, were could orders Right No, first we quarter,

have levels to the $XX on been or and really back shipped. the as could I being envelope additional $XX be too we we is of million it million So specific, could point made, as have have but could and here. don't in we elevated But had much want

Now people buy it for the cough/cold season.

So they had to buy something.

up, more production again, I'm that's And than significantly. even so They job, still factories cough/cold did there our but why our So were in was and that. was up excited. demand a the brilliant numbers

wasn't it of with that's morning. about and simplification SKUs about of talked the excited standardization that I'm call about reinvention what But why talked really haven't X,XXX the X,XXX We invested is over don't in combination can we're to and and adding it it we share, -- capital. that. return continue than to because build mindful but no we prices be Redzone return of equipment want increases market And the this so and what I chain supply over because does capacity getting for just grow our lowering on of on

our say to program. things of did chain all I'm throw simplification in first more in in So the increase to -- are cough/cold in that line effective this standardization this to this. X part got the that able operational less lines we elegant path sort changeovers away and a business better those And we excited on operational where and capacity in and those to solution good reinventing quarter, welder of test an effect XX% this be supply see through and XX% of and to is we

what that's pushing we're for. So

back back? forward. -- it It when is it like We cough/cold shows the potential got it it season So it's get we do there, not can play get out. pushed but next we

Daniel Biolsi

some it then on some you'd reducing expected? pushback? what are have that, about been Or Right. initial Murray. up customers with And Has of been just been what Thank you your your following there conversations the SKUs?

Murray Kessler

expected. for to low-hanging the better consumer-facing. Eduardo no, speak And not we're you've fruit going on part this, if No, is than low-hanging first. the the But listened fruit is it's that

complexity So not, , you're terms not difficult it the But bottle be size the in or more customers, the of have actually consumer-facing. of about consumers pills is in a XX% etcetera. of complexity in or when decision the between believe it we what the talking now, the number see will of

where another one size customer really whose it matters and So stop a -- X corrugated. it but an it changeover have line could be to and is the as for eighth slightly of different or is you to perceivable but the eye, inch label the not size, major have label we a even do figure to an it's than new bottle

inside. dimensions X national outer get shrink might the be quarter It together, together, the XX it wrap where together, of thickness X wrap got packed a X inch, wrap inch shrink inch it, You've X.X X only and of brands could corrugated, together, the be variations. the shrink wrap

Perrigo of complexity complexity And being with system built a working its a over this it how time, complexity sort specialist, and customization much realized customers, into no all one added. but

all we with front at on didn't those of they're even to and this kinds been can't that's And wow, were is like we us thing and and the and they case same complexity, can So gave factors. that, but not that again, label in Investor example and year of of carton that use least agrees I we get it's size of automatic XXXX, everybody I've know because at Day, a like -- things. different standardized outer

brand products [indiscernible], XXX, to standardize next are is to get know possible. do well, want less. we we some have where ought in out because It And and look as and branded and X,XXX we'll the calculator cost say math. as and count see in XXX, we Listen, So years comparable sizes, as company, at will still when not brand much at that be of consumer go brand national and the easier. it's go frankly, heart some to that years, to -- or want first is, of when consumer shelf, bigger of consumers doing us but we will facing what you it everybody not a you national of did to together to or we a which be They study the will this set is X of to be do massive get X that then whether guide we shrink say, can the they the it's XXX SKUs for store the that to work back that be to need just

Daniel Biolsi

Thank you.

Operator

for Murray the President have session. and to conference back conclusion Kuster, and of remarks. our to time we for over like question-and-answer any would That's turn closing marks the CEO, all I

Murray Kessler

Yes.

to thank heck it whether for a you once many was business the you to again, Just in in UST, investing of it. everybody worked in actually for your say for but and term, buys, can I been I've here tell of at and the see as and and Lorillard as will hard I you short, good all over I it's you make that work Perrigo off Perrigo of I continue hope believing before Perrigo. me at final Thank pay medium, or hard and then or you, support you trust run, my interest can your in long a us for

your for in Perrigo. interest again thank So you

Operator

today's attending conference Thank has The for now concluded. you presentation.

You may disconnect. now

Perrigo (PRGO) 9 May 232023 Q1 Earnings call transcript