Perrigo Initiates a Strategic Review of Its Infant Formula Business for Future Growth

-- Perrigo Company plc, a key player in consumer health products, has announced a comprehensive review of its infant formula business. The goal is to explore a variety of strategic options that align with their commitment to financial discipline and optimal returns on investment.

As part of their 'Three-S' plan—Stabilize, Streamline, Strengthen—this initiative marks an important step for Perrigo in assessing their future direction in the infant formula market. The review seeks to identify new growth opportunities while optimizing existing investments, especially considering the company's earlier commitment of $240 million to this sector.

In 2025, the infant formula segment is projected to generate around $360 million in net sales, making up nearly 90% of Perrigo's global Nutrition category but still less than 10% of its total yearly sales. Despite the complexities and rapid changes in the market landscape, Perrigo's infant formula operations have stabilized and are continuing to ensure the delivery of quality products. The company emphasizes its role as a significant player in the U.S. market, especially as a large-scale store brand and contract manufacturer, with a promising innovation pipeline in the near future.

President and CEO Patrick Lockwood-Taylor highlighted the importance of this review, stating that it is crucial for ensuring the company is strategically positioned for sustained growth and free cash flow generation. While the infant formula business has stabilized, the fast-evolving external environment has raised questions about its alignment with Perrigo’s overarching consumer health strategies. The CEO reinforced the need to prioritize corporate goals including reducing debt, sustaining a dividend policy, and enhancing customer partnerships, all while honing in on their high-potential over-the-counter (OTC) portfolio.

Although the review is underway, Perrigo has made it clear that no decisions have been reached yet, and there isn't a defined timeline for the completion of this strategic evaluation. The company will only provide updates if significant changes occur or if any decisions related to this review become necessary based on prevailing circumstances.

About Perrigo: For over a century, Perrigo Company plc has established itself as a leader in self-care, delivering high-quality health and wellness products to consumers primarily across North America and Europe. As a pioneer in the over-the-counter (OTC) market, Perrigo provides accessible self-care options that do not require prescriptions, thus ensuring that consumers have a broad range of choices across various product categories.

The company’s unique model supports the dual growth of both store brand private label products and leading brand names like Opill®, Mederma®, Compeed®, EllaOne®, and Jungle Formula®. This synergy allows Perrigo to invest in an innovative product range while providing consumers with trusted health solutions. As Perrigo moves forward with the review, stakeholders remain hopeful for the continued development and expansion within the infant formula and broader health markets.

In summary, this strategic review represents an insightful initiative by Perrigo to refine its focus on consumer needs and optimize capital allocation for enhanced performance in the competitive landscape of infant health products. The company is dedicated to its mission of supporting families by providing safe and affordable infant formula, ensuring a secure product supply chain through this transition period.