Why Did Perrigo Stock Tumble 9% Pre-Market Today?

• The review will evaluate multiple strategic options, and no specific timeline has been set for completing the process.
• The review is part of an ongoing effort to optimize operations and drive shareholder value. 
• Perrigo expects the infant formula unit to generate approximately $360 million in net sales in 2025.

Perrigo Company plc (PRGO) has announced plans to undertake a strategic review of its infant formula segment as part of an ongoing effort to optimize operations and drive shareholder value. 

The review will evaluate multiple strategic options, and no specific timeline has been set for completing the process.

Part Of Perrigo’s ‘Three-S’ Strategy

The company stated that the initiative aligns with its ‘Three-S’ framework, ‘Stabilize, Streamline, Strengthen,’ which aims to improve capital discipline and boost returns on investment. 

As part of the review, Perrigo will reassess its previously announced $240 million investment in the infant formula business while exploring ways to accelerate cash flow. 

Following the announcement, Perrigo’s stock traded over 9% lower in Wednesday’s premarket. However, on Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory. Message volume shifted to ‘high’ from ‘normal’ levels in 24 hours. 

Financial Impact And Business Role

Perrigo expects the infant formula unit to generate approximately $360 million in net sales in 2025, representing about 90% of its global Nutrition category and less than 10% of total annual revenue. 

The division, which has recently stabilized operations, remains the only large-scale U.S. contract manufacturer of store-brand formula.

“While our infant formula operations have stabilized, the external environment has quickly changed, making a fit with our consumer health OTC businesses less strategic.” 

-Patrick Lockwood-Taylor, President and CEO, Perrigo. 

“Whatever path we choose, our corporate priorities are clear: reduce leverage, sustain our dividend policy, continue to deliver on customer partnerships and sharpen focus on our high-potential OTC portfolio to reach more consumers and drive household penetration,” said Lockwood-Taylor.

Perrigo's stock has lost over 21% year-to-date. 

Also See: China Ditching Foreign AI Chips? Report Says New Data Centers With Government Funding Must Rely On Local Ones

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