Perrigo reports strong fourth quarter
In what the company calls its first year of transformation as it positions itself as a consumer self-care company, Perrigo released its highest earnings of the year in the fourth-quarter, capping off what was steady acceleration each quarter of the year.
Perrigo has been actively acquiring private brand businesses, which, according to the company's earnings call, already are proving fruitful already. Among Perrigo's recent moves has been the acquisition of the High Ridge Brands’ oral care portfolio and before that the acquisition of leading private label oral care company Ranir in July 2019. Most recently, Ranir acquired Steripod, a maker of toothbrush accessories.
The report showed net sales to be $1.3 billion, up nearly 11%, year over year, and adjusted net sales showed an increase by 13.4%. The Consumer Self-Care Americas division achieved a record-high fourth-quarter earnings of $711 million and a growth of 15.2%, versus the year before. Within that group $52 million in sales can be attributed to Ranir.
In the earnings call, Perrigo noted that the store brand business within its Consumer Self-Care Americas division benefited from private brand penetration in the category as a whole against national brands. “Perrigo gained share from other store brand competitors as a result of new product launches and distribution gains on existing products,” said Murray Kessler, the company’s president and CEO. “That is to say, Perrigo got a larger share of a bigger slice of a bigger pie.”
Also in this department, a new store brand infant formula product launched in the quarter with a major retailer drove growth in its OTC business.
Internationally, the business saw net sales increased by 8.2% to $356 million. Of that number, $22 million can be attributed to Ranir. In the U.K., Perrigo’s store brand business, combined with the addition of Ranir in the oral self-care category, private brands represent a larger percentage of the total Consumer Self-Care International business, the call said.
“We are particularly pleased to have driven a sequential acceleration in growth each quarter of the year culminating in a record fourth quarter for our Consumer Self-Care Americas net sales,” said Kessler. “We also made key strategic investments in innovation programs, bolt-on acquisitions and structural changes to fuel long-term profitable growth. These efforts helped us generate annual profitability in line with our expectations."
The call ended with a thank you for the 36 years of service by Jeff Neeham, president of the consumer Americas business, who is retiring.
“Jeff is an icon in the store brand industry and is loved by his colleagues at Perrigo and across the industry,” Kessler said. “He leaves CSCA in strong shape with a great team, and he will be transitioning the business to Rich Sorota, CEO of Ranir, who will become President of CSCA in March, to enable enough transition time prior to Jeff's departure. Rich has the experience and fully aligned with our consumer self-care strategy. CSCA is in good hands.”