PRGO - Perrigo falls 10% as forex headwinds lead to Q3 miss and guidance cut

Perrigo Company plc ( NYSE: PRGO ) shed ~10% pre-market Tuesday after the Ireland-based OTC product maker announced lower-than-expected Q3 2022 results and trimmed its full-year earnings outlook, citing unfavorable currency changes and other reasons.

"Although revenue growth in the quarter was robust, it was below our estimates due to unfavorable currency translation, labor shortages effecting supply and slower category growth rates," Chief Executive Murray Kessler remarked.

Driven by ~8% YoY growth in organic net sales, the net sales for the period rose ~6% YoY to $1.1B, indicating a ~12% YoY growth when adjusted for the impact of currency translation.

Net sales attributed to Perrigo's ( PRGO ) Consumer Self-Care Americas (CSCA) and Consumer Self-Care International (CSCI) segments jumped ~4% YoY and ~8% YoY, to $722.3M and $377.9M, respectively.

While the company's reported gross margin rose by 210 basis points from the prior year to 33%, the reported operating income dropped to $33M from $438M in last year's quarter when there was a benefit of $418M related to the Omega arbitration award.

Perrigo's ( PRGO ) net loss per diluted share dropped to $0.39 from $0.40 in the prior year, and adjusted diluted EPS rose ~24% YoY to $0.56.

However, the company lowered its outlook for full-year adjusted EPS to $2.00-$2.10 from $2.25-$2.35, below the $2.28 per share in the consensus. In addition to forex headwinds, the management cited lower sales volumes in the CSCA segment as reasons for the guidance cut.

Meanwhile, Perrigo ( PRGO ) maintained its 2022 total net sales growth to 8.5%-9.5%, in line with ~9.4% YoY indicated in the consensus.

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