President and CEO Murray S. Kessler—who announced he will retire on July 31, 2023— called the results “tremendous.”
“The company once again delivered double-digit top line growth, and 36% adjusted EPS growth. Importantly, adjusted gross margin expanded by 400 basis points driven nearly equally by the Perrigo base business and benefits from recent acquisitions. Consumer demand was strong across our global portfolio, and, except in categories where we are capacity constrained, Perrigo gained market share globally,” said Kessler.
Q1 2023 Results from Continuing Operations
CSCA eported net sales of $764 million, an increase of 7.6%, and organic net sales increased 4.0%. Reported net sales growth was driven by strategic pricing actions and favorable volume/mix, but growth was partially offset by the March 2022 divestitures of the Latin American businesses and ScarAway brand asset. Oral Care net sales were$84 million, an increase of 19.9% due primarily to the normalization of supply chain disruptions that impacted net sales in the prior year and strong consumer demand for oral care products, including both store brand offerings and brands such as Plackers, Firefly and Reach. Skin Care net sales were $52 million, an increase of 27.9% due primarily to the addition of HRA brands, including Mederma and Compeed, and higher net sales of minoxidil-based products stemming from increased manufacturing capacity. This growth was partially offset by an unfavorable impact of 6.1 percentage points from the divested Latin American businesses and ScarAway brand asset, the company said.
Consumer Self-Care International Segment (CSCI) reported net sales in the quarter increased 14.7%, constant currency net sales increased 23.6% and organic net sales increased 11.0%. Skin Care net sales were $83 million, an increase of 12.9%, or an increase of 26.1% excluding the impact of currency, driven primarily by the addition of HRA brands, including Compeed. This growth was partially offset by the reclassification of anti-parasite offerings from the Skin Care category to the Healthy Lifestyle category, according to Perrigo. CSCI’s Healthy Lifestyle net sales of $66 million increased 12.7%, or 17.3% excluding the impact of currency, due primarily to the reclassification of anti-parasite offerings from the skin care category to the healthy lifestyle category and higher net sales of anti-parasite offerings that continue to outpace strong category growth, partially offset by lower category consumption in weight management, impacting XLS Medical, Perrigo said. Oral Care net sales were $29 million, an increase of 0.7%, or 6.9% excluding the impact of currency, due primarily to new products and market share gains.CEO Kessler Announces Retirement
Kessler, who was brought in to lead the company transition from a healthcare operation to a consumer selfcare company— will retire as president and CEO with a target effective date of July 31, 2023. He will be working with the board of drectors to secure his successor and to ensure a smooth transition."After 18 years as a public company CEO, I have decided that this is the right time for me to retire,” Kessler said. “I joined Perrigo almost 5 years ago to lead the transformation of the company from a healthcare to a consumer self-care company. Leading that transformation has been one of the most exciting assignments of my career. From fourteen M&A transactions to reconfiguring the company's portfolio, the near complete elimination of a $4 billion tax and legal overhang, to the strategic path put in place to create value for the future, I am proud of what my team, with the Board's support, has accomplished. The fact that this all happened in the face of an incredibly difficult macro-economic environment makes the transformation that much sweeter."
Kessler continued, "All of the pieces are now in place. Perrigo is growing its top line, its margins and its bottom line. It has a strong plan in place to reduce leverage, it has amazingly talented employees and it has a clear plan to deliver strong growth going forward. This is exactly the right time to hand over the reins of Perrigo to the next leader who can relentlessly drive the execution of our strategic plan for years to come. I truly believe that Perrigo is set up for a bright future and to create tremendous value for investors."