Q3 2025 Perrigo Co PLC Earnings Call
Good morning, ladies and gentlemen, and welcome to perigo Q3 2025 Financial results conference call.
At this time, all lines are in the lesson. Only mode following the presentation, we will conduct a question and answer session. If at any time during this, call, you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, November 5th, 2025.
I would now like to turn the conference over to Bradley Joseph, vice president, Global investor relations. Please go ahead sir.
Good morning and good afternoon everyone. Welcome to paragraph's third quarter 2025 earnings conference call. I hope you all had a chance to review. Our 2 press releases issued today.
Copy of both releases and presentation. For today's discussion are available within the investor section of the paragraph.com website. Joining today's call our president and CEO Patrick Lockwood Tower and CFO at wizer
I'd like to remind everyone that during this presentation, participants will make certain forward-looking statements, please refer to the slides, for information regarding these statements which are subject to important risks and uncertainties.
We will reference adjusted Financial measures that are non-gaap in nature.
Did the appendix to the earnings presentation for additional details and reconciliations of all non-gaap to gaap financial measures presented.
Discussed and presented are on a continuing operation basis. Second organic growth. Excludes Acquisitions domestic products and foreign currency fluctuations in both comparable periods.
Third regarding the strategy reviews discussed. Today, we will not provide further updates in less, and until the company determines further, disclosures appropriate or required.
And finally, Patrick's discussion will focus solely on non-gaap results. Except as otherwise noted and with that, I'm pleased to turn the call to Patrick.
Thank you Greg. Good morning. Good afternoon. And thank you to joining today's call.
I'd like to begin by addressing recent category. Consumption Trends across consumer health.
Which remains soft reflecting broad short-term Market pressures.
against this backdrop here it goes, delivered sustained, share, gains and advanced key initiatives under our 3 years plan,
To stabilize streamline and to strengthen.
These efforts are enabling us to navigate the challenging landscape while making steady progress on our strategic priorities.
A reinforcing. Our long-term value proposition.
With that context, the terms, how these Trends influenced our year to date performance and our Outlook going forward.
Let's start with us OTC. The perago continued to outperform despite a challenging Market.
While total OTC volume consumption. Has recently declined versus the prior year period store brand has delivered 6 consecutive months of sharing games. These games were driven by a strong execution consumer trade across from National brands.
New distribution of business wins against key, store brand competitors.
Diving into a bit deeper, you can see on the right hand side of the slide that over the last 13 weeks, perago gained volume share of 90 basis points and across nearly every OTC category. We compete most notably smoking sensation allergy and Women's Health.
Sustaining volume share games. And this environment, underscores the winning OTC strategy and validates, the strength of our value, proposition to retailers and consumers.
In the EU total OTC Euro consumption has also recently declined despite this period's key brands are gained dollar. Share for 5. Consecutive months driven by a strong brands with unique value. Propositions our highly focused amp Investments and Innovation and targeted activation strategies
These durable gain is highlight the strengths of our category LED approach and the resilience of our key Brands, including L1, jungle formula, and our coal products, video are and cold Rex.
Though our remaining brands in the EU have been impacted by similar Trends. The broader Market a key Brands illustrate, the strength of our portfolio, where we have concentrated our resources.
In total Pergo share games across the US and Europe particularly in the current challenging environment under schools at the strength of our execution, at a relevance of our unique multi-price. Point OTC portfolio.
Building on our share games in both the US and Europe. As terms of the progress, we've made against our 3s plan. Stabilizing streamlining, and strengthening
Which continues to guide our actions and priorities.
We've stabilized, our us OTC store, brand business, and are outperforming the market and the categories we compete.
As I just mentioned, we're getting volume share for 6 consecutive months.
This success and consistently growing share in a challenging market results directly from disciplined execution and is clear evidence that this business is winning in the market.
In in Formula store, brand is also gained share.
And operationally. We are consistently delivering safe affordable formula to parents and caregivers.
We also continue to streamline our organization delivering as 1 paragraph.
Initiated in 2022, our supply chain reinvention remains on track to deliver between 150 and 200 million dollars in benefits by the end of this year.
Project energized, which is generated 163 million in gross, annual so savings above the midpoint of our 140 to 170 million range.
These efforts are leading perago back to our core strengths, which is consumer health.
The sale of our durmak Cosmetics, business remains on track to close in the first quarter of 2026.
And announced this morning, we are now actively reviewing the income formula business and I'll give more on this in a moment. We also continue to strategically review, our all care business, which we announced at our February investor day.
We've made meaningful strides to strengthen your organization. Our new leadership team is in place. We are skating new brand building capabilities, and we have an improved to the highly focused Innovation process.
Implementation of our commercial growth model is expected to unlock the full potential of our portfolio. Enabling teams to scale, more molecules more efficiently to more consumers, across more markets.
Finally, we are leveraging consumer insights and deepening. Our retail Partnerships and ways of differentiate paragraph versus competition.
This is a new way of operating and the team is energized about the possibilities ahead.
And that's what quarter 3 and year to date results where our Diversified portfolio. Continue to demonstrate resiliency and a challenging environment.
The third quarter organic net sales declined 4.4%, impacted by 1.6% from our Global OTC business, due primarily to soft OTC calorie consumption, and 2.8% from businesses under review. Both Oral Care and infant formula growth profit and margin were down year-over-year, reflecting net sales performance.
Operating profit and margin were partially offset by prudent cost management.
As projected, the importance of scrap expense experienced in Q2 did not repeat, which drove meaningful sequential gross and operating margin expansion of 180 and 318 basis points, respectively.
Collectively, these factors led to a third quarter, EPS of 80 cents of 1 Penny versus the prior year.
year to date organic, net sales, decline, 1.7%, primarily driven by
0.8% from the businesses under review that, I just mentioned.
In addition to 0.5% from the absence of last year's, Outfield launch stopping benefits.
A remaining OTC business accounting for the balance.
Despite Marketplace challenges year-to-date growth and operating margins expanded and organic operating income. Grew 13% driven by continued execution of our increased initiatives.
Recovering and infant formula and prudent cost management.
Year to date EPS grew, 21% or 27% organically the $1.97.
New today, consumption across the consumer health sector has been dynamic and unpredictable.
Order 1 through the year. Over year growth for the 2 move from growth to decline in June. And this decline significantly accelerated in the third quarter.
The drivers appear transitory and do not look structural in nature.
Combined with updated assumptions, for our own conform, the business. These factors have led us to revise our 2025 Outlook.
This is the right decision for the long-term stewardship of Perrigo and our shareholders.
The US store brand OTC Perrigo, increased dollar unit and volume, share, and 5 of the 7 categories where we compete.
Europe are key Brands, including L1, jungle formula company and our custom cowranch also outperformed expectations.
To capitalize on this momentum, we reallocated additional amp investments in both regions.
Generating approximately 30 million dollars in sales over and above our initial forecasts, and delivering, a solid return on investment.
at the same time Market consumption, Trends have been softer than the anticipated
over the latest 13 week, period, us OTC volume has a total category declined 3.2% while Europe grew just 0.6%
Falling short of our original assumption by roughly, 700, and 500 basis points respectively.
This represents an estimated $150 to $170 million impact to our 2025 net sales outlook.
lastly.
Distribution is contributing an additional 100 million dollar impact.
Continuing within from formula today, we announced a strategic review of this business as we assess its long-term role within the paragraph portfolio.
while we have stabilized this business,
the external environment as quickly shifted.
Which will require sustained investment and disproportionate management. Focus making its long-term fit alongside our faster growing higher cash yielding consumer health OTC, portfolio, less, strategic.
As a result, the team will consider a full range of options. In addition to pausing, our previously announced investment of 240 million
No matter the outcome of this review, our corporate priorities are unchanged. Reduce Leverage
Sustain our dividend deliver for customers and shareholders and focus on our high potential OTC portfolio to expand consumer access and household penetration.
During this review, the business will continue to operate as normal ensuring consistent and reliable supply of high-quality formula to customers and consumers.
We are executing off. 3s plan with discipline growing sharing Us store brands and gaming, sharing our key European brands.
These results show the resilience of our unique business model and validate our value proposition even in the soft consumption environment.
at the same time we are delivering benefits from the supply chain reinvention and from Project energize,
We're also sharpening our focus on consumer health with the amounts of democracy and our actively reviewing, both infant formula and all repair.
Our soft ATC consumption. And income formula are prompting a revision to our 2025, Outlook the momentum, from our 3s players, and our share gains, reinforce our confidence and period's ability to capture the durable, demand, The Trusted consumer Health Solutions.
With that, I'll now turn the call over to Eduardo to walk through the financials.
Thank you Patrick. Hello everyone.
Looking at the third quarter financials starting with the gaap to non-gaap summary.
Primary adjustments to our non-gaap financial results were first.
I'm organizational expense of $56 million.
Second restructuring charge of 21 million, primarily related to project energized and supply chain reinvention, and third unusual. Litigation of 15 million dollars. Full details can be found in the known Gap. Reconciliation tables attached to today's press release.
from this point forward, all Financial results discussed will be on an adjusted basis unless otherwise noted
Patrick noted earlier that the software OTC category's consumption in both the U.S. and Europe weighted meaningfully on topline performance this quarter.
Since you already provided detail on those drivers, I will begin my commentary with gross profits.
Third quarter gross, profit of 417 million dollars, declined, 30 billion dollars year-over-year primarily due to the impact from lower net sales, and disasters, and exited products.
these factors partially offset benefits from our supply chain reinvention, and favorable current Citrus relation,
Whereas margin for the quarter declined. 110 days is points due to the same factors and included, higher sales from relatively lower margin store brands versus our branded product portfolio.
Here today. Gross profit of 1.2 billion dollars decreased 27 million euro per year including a $40 million impact from the investors and exited products for granny gross profit was flying to Prior year. While organic gross margin was tough 60 basis points. Coming from infant formula recovery and a created initiatives.
I will discuss operating profit and earnings per share in just a moment.
Turning to net sales performance by segments starting with csci
third quarter organic, net sales decreased 5.3% impacted primarily by Soft OTC category, consumption, Trends, partially of steps by sharing in key Brands, and new products,
Brands including jungle 4A iniquity.
These drivers were partially offset by decelerating category consumption, beginning in the second world.
Csta third quarter, net sales declined 3.8% with us. OTC growth of 6% driven by sustained. Share gains across 5 of 7 store brand categories and growth in our contract business.
Growth was led by upper respiratory skin care and Women's Health, which were partially offset by digestive health and healthy lifestyle.
Third quarter growth, in OTC was more than upset by a 4.4%, decline from business. Under strategic review 3.8% from its own formula and 0.6% from World gear.
Year to date CSC. Net sales declined 3.1% due to an impact of 1.1%, from business, under strategic review and the absence of the prior year of Peel launch stocking benefit of 0.8 percent.
The remaining OTC business was down 1.2% as continued, soft Market. Consumption was partially obsessed by store, brand, share games?
third quarter, operating income of 173 million decreased 9 million
operating income was down 4.9% to primarily to lower net sales flow through and higher operating expenses in different formula.
This impact was partially offset by growth from the rest of the business including benefits from Project energized and prudent cost management.
Advisors and exited products were fully set by favorable currency translation.
Year to date, operating income of 455 million. Increased 41 million driven by global OTC benefits from a created initiatives. Infant formula and favorable currency translation partly of set by divers, and exited products, organic, cooperating, income grew 13.2% in the periods.
Despite clear marketplaces third quarter, 2025 EPS was 80 cents compared to 81 cents in the prior year.
Year to date earnings per share of a 1.97 was up almost 21% for 27% organically.
32 balance sheet and cash flow.
Third quarter, operating cash flow was 52 million bringing here today to operating cash flow to 63 million.
Year to date. We invested 67 million in capital, expenditures and returned, 119 million dollars to shareholders through dividends.
In cash on the balance sheet, at the end of the third quarter was 432 million.
Given our opportunity, how to look, which I will detain in a few minutes. We now expect year end net debt to adjust to the data of approximately 3.8 times versus our prior Target of 3.5 times. Due primarily to our updated net sales expectations
We remain on track to close the Derma Cosmetics sky vesture in the first quarter of 2026, and expect to use the net proceeds to advance our deleveraging goal.
As part of our announcement, the Strategic review of the infant formula business. We have calls to the previously announced 240 million dollars investment. Until we determine the best path forward for the business as a quick update. Our oral care. Business is still undergoing a strategic review.
Taking all of these into account as outlined by. Patrick, we are updating our fiscal 2025 Outlook from the low end of our previous organic. Net sales Outlook range to minus 2 to, to minus 2.5% organic, net, sales growth, due to software, then, expected OTC category, consumption involves the US and Europe, as well as lower than anticipated. Infant formula shared growth.
As a result of the Top Line updates, we now expect gross margin of approximately 39% for the year.
We are. However, we are farming operating margins for the year of approximately. 15% as benefits from a creative initiatives and prudent cost management of set of the gross margin adjustment.
These updates translate to a 2025 earnings per share range Outlook of $2.70 to $2.80, equating to 5 to 9% growth versus 2024.
Few comments on our year-over-year Q4 expectations before I close my remarks.
On the top line, we expect organic growth in our Global TC business of approximately Flats to 1% while sales in our nutrition. Category are expected to be down year-over-year, due to lower contract volumes and the comparison against restocking activity, in the prior quarter.
To 4 margins are expected below prior levels, due to the impact of lower volumes and target for related costs.
Operating expenses for the total company are expected to be relatively flat year-over-year.
We're lapping a prior year Q4 tax rate of 14.9% versus our expectation of approximately 18.5% on a full year basis for 2025.
In closing this quarter, we reflected both the resilience and the pressures in our business.
Software OTC consumption and is lower infant formula recovery weighted on sales, but we still deliver year to date. Our news per share, growth of more than 20% and double digit, organic cooperating income growth,
Margins are holding through discipline cost management and the benefits of our efficiency programs. We remain committed to returning cash to shareholders, while reducing leverage supported by depending durmak Cosmetics, digestion,
We adjusted our 2025 outlook to reflect current realities, but our actions to streamline the portfolio, manage costs, and focus investments on high-performing brands give us confidence that Perrigo is positioned to navigate near-term challenges and deliver stronger, more durable performance over time.
Thank you. And I will now turn the call back to brand brand brand.
Thanks Eduardo. Operator, can we please open the call for questions?
Thank you. And ladies and gentlemen, we will now begin the question and answer session to ask a question. You may press the star, followed by the number 1 on your telephone keypad. If you're using a speaker phone to speak of your handset before pressing the keys to withdraw your question, please press star followed by the number 2 with that. Our first question comes from the line of Susan Anderson with Korg.
Please go ahead.
Hi, good morning, thanks for taking my question. Um, I guess maybe just to follow up on the Infant Formula. There seems to be, I guess a pretty widespread between the sellout data and your sell ends, just curious, you know, was that mainly docking by retailers in the quarter? And I think you said you did say that your share was up in the quarter and then I was curious how the new skus that you introduced how those were doing and then just, you know, in general what kind of drove the Miss versus your original expectation. Thanks.
Hi Susan. Uh, Ed here. So a couple of comments, couple of comments here. So first of all, yes, we're seeing a pick up in our store brands, you know, share. Uh, it's been that the is lower Pace than we originally anticipated, right? So remember, we were expecting to be at a low 20s, you know, at the end of the year, give it the competitive environment. You know, it's still continue to see significant, you know, important formulas, coming to the marketplace. We're seeing a growth in our Sovereign chair. So, in Q3, we did several actions in terms of drawbacks and promotions to make sure that we, we need to Consumers on where they need. And so, that has evolved, and we're seeing significant in an improvement in our share.
And then as a region expected, uh, those are not, uh, uh, materializing as well because of, you know, the, the new Imports, the Imports that are getting to the marketplace today. Susan, you also asked about SKU velocity, um, you actually hit the nail on the head, the distribution, build up of a new skus has been per plan. The velocity. We're seeing on those skus is below expectation. Uh, the reasons are clear and being fixed its position on shelf, and it's a matter of shelf space given to informal store brand is below what it historically was that's impacting business for retailers, and of course, for us and as being addressed,
Okay great. Uh, thanks for the details there, I guess maybe just a follow-up on the csci business, um, on the couple of the segments, I think, in women's health, you talked about some Supply constraints. I guess just curious what drove that there and I think it's been resolved now. And then also in uh, VMS there, I think you mentioned, deep prioritization, as Neutra calls. So, um, curious kind of what's driving that and then I think you also said consumption was a little weaker in VMS and international just curious. If the consumer is kind of pulling back on that category, I think.
Yeah. So a couple of things there, uh, as we compared to last year, right? So last year, we had a stronger. Q3 there was also some, uh, early, uh, signs of, you know coughing cold last year, different than what we're seeing this year. So, we expect a shift between Q3 and Q4 in cfci, specifically to your question regarding Women's Health. That were some supply issues on our L1, which is the key brand that we have there in in Europe, but those have been resolved and we expect that to pick up back in Q4 also in zms. Yeah, the neutral cyclical portfolio. It's something that we have been deep prioritizing overall versus some of our brands that we have both in the Netherlands and, and Germany that are performing relatively uh goods. And then the last piece on the soft OTC consumption.
That's something that we're seeing more broadly, but, uh, as we look into Q4, when we highlight, you know, uh, our expectation, to be flat to 1%, we expect a significant pickup in, uh, csci as compared to what we saw in Q3. So, I again, last year we saw a stronger Q3 versus Q4 this year, we expect a shift because also seasonality, as well as expect, you know,
More taking place in Q4 versus what you saw in Q3 this year. That's why we're expecting. You know uh uh an important growth sequentially in csci that's about 5 to 6% on that sales.
Okay, great. That's very helpful. Thanks for all the details.
Thanks Susan. Next question, please.
Thank you. And your next question comes from the line of Keith Davis with Jeffrey. Please go ahead.
Good morning. Thanks for the question.
Um, I'm curious.
More color on what changed intra quarter on on both OTC and um, infant formula versus the original plans that you guys have given a lot, um, already but I guess the volatile consumption. Um, we're seeing across a lot of categories and Staples, and it doesn't feel normal. So I'm curious what you think is driving it. Whether it's, you know, added consumer pressure or maybe mitigating to lower pack sizes and maybe how your conversations with the retailers have. Also evolved over the year,
Yeah. Hi uh, its own OTC consumption. Um,
We're back reviewing this data yesterday, in 4 to 1. We saw consumption growth. Actually ahead of expectation between 3 and 3 and a half points.
Quarter 2, I remember this. We get this data, like you retrospectively quarter 2. We started to see a Slowdown then moving into slight decline. Um, with actually June
appearing to be, um, flat to a year ago and sort of pass through that then continued and actually accelerated, uh, really from August onwards. Um, and uh, October consumption was weak as well. Okay, so this
um,
and obviously suffer than than we and many others had anticipated.
On infant formula.
Uh and I just talked to this with Susan, the new velocities that we've seen have been below expectations. That's obviously affected revenue and that's affected our our share build.
Um, but we believe is addressable.
to your, um,
Question on drivers: there is a multitude of tactical drivers via feature levels and display levels. Some changes in distribution and some changes in pricing have affected us. We've seen over the last 2 to 3 years very strong price inflation in this category, which was building category value. That seems to come to an end in Q1.
Um,
you have seen though trade across and to store brand, you're aware that store brand OTC is growing, share. And we're growing up there within that as well.
This doesn't appear to be structural. There is no real change in in incident levels across these treatment categories.
um,
Changes in consumption habits across different generations.
there are some effects of that but I I I I don't think that that is material and it's certainly not subtle.
Um,
I think there is some speculation that people consumers are burning through Pantry stock to a greater extent than they historically have done.
I haven't seen data personally confirming that but I have heard that hypothesis, um, and they cough cold season. Um, is definitely down on a year ago through now. Um, but we are still out looking a, a average season for for cock cult.
so again a multitude of tactical factors, no evidence that we've seen that this is a structural change um and we would expect therefore normalization of the market as I think you've heard some of our competitors say
And also give just to complement what Patrick said, right? So different than what, uh, I I mentioned about CCI that we expect a Q4, uh, is stronger than than Q3 right. So, uh, as compared to what happened last year, you know, we expect to see some Trends, you know, continue, uh, in the US, uh, OTC. Uh, so we expect a normal season.
Coughing cold, but as compared to last year, we expect Q4 to be down. So the net effect of being 0 to 1. It's a positive on the uh
CSA side of about 5 to 6 and negative on on the on the on the US despite all the share gains and distribution that we're seeing on that side in the US. Um, also the important thing is the reduction that we're seeing infant formula that helps contribute significantly with that because of, you know, as I mentioned, lower contract volumes and also, you know, it's lower pace of regain our, you know, store brand share uh on the Infant Formula business.
Got it. That's very helpful. If I could squeeze in a follow-up, but I'm curious how you guys are also just thinking about reinvestment plans, uh, just giving the pullback in consumption on OTC and now you know, uh pausing, the infant formula investment are there any areas where you're looking to increase spending? There's obviously some green shoots with new business wins and then obviously International. So um interested in how you're thinking about maybe potentially reallocating spend going forward. Thanks.
Yeah, I'll come in first case. And then later, um,
As you heard me saying, in my comments are, are, are priorities. Remain the same deleverage?
Uh, maintain our dividend.
Um,
But we will revisit investment in organic growth. Okay, we see increasing evidence of uh performing businesses Us store brand the right to mention the acceleration of share growth. We're seeing in our, our key International branded business and our brands in the US,
um,
our priorities and determine what's best obviously for the asset long term, but also for shareholders
So yes, we will be undertaking. Um, another look at Capital allocation, uh, given that decision we've made on infant formula, but the priorities won't change. We just may increase, uh, the level of some of those, uh, allocations.
Everyone. Yeah, nothing else to to add here. Kids.
Thanks. Bye. Thanks for the question.
All right, thank you. And the next question comes from the line. Uh, Chris shot with JP Morgan. Please go ahead.
Chris shot, thanks for taking our questions. Um, just to start off, maybe following up on some of the previous questions.
Good morning. Thanks to the question. My my view is uh we have seen, we're at about a 16 share.
We have played building blocks to continue growing that uh in 25 and into 26.
um,
And I would expect that over the next 12 months, with those building blocks that we have, you're getting to the sort of 18% to 20% area in terms of share.
Important there to to mention it's you know as we announced this morning on our infant formula strategic review. Alright, so we're looking to multiple options of how we want to look into that business. You know, to make sure we optimize that and, uh, you know, both on our near term but also long term, you know, uh, and and make sure this is going to be the best result also for shareholders.
Perfect. And then just 1 more question for me. Just overall looking to 2026. Um, appreciate that it's still early, but it was just hoping you could, maybe provide, how you're thinking about the different pushes and pulls in the business, as well as maybe the ability to grow you, but are looking at the next year. Thank you.
Yeah, so a couple of comments here. So, you know, we're still early, you know, stage on the 20 processor, you know, we're seeing it's basically, uh, you know, a a, a short term, you know, consumption impact there. So we believe there is a stabilization expected for 2026. So more expecting to be like a flat to a, a small percentage growth with that sadly continue to expect our share gains to continue there and also translate into growth is likely ahead of the market. Um, on the Infant Formula side, you know, foreign manufacturers have grown us
Share. And so we're looking at that to make sure we continue our, our plans to recover our share, but at the same time acknowledging there will be more Idol domestic capacity in the US in fact, in absorption for domestic players. And also we are addressing this. Trended cost impact of our durmak cosmetics by vesture, right? So we expect to close that by end of q1. And so we expect about
9 months of inorganic headwind of approximately 100 million dollars on our Top Line and depending on the timing of the clothes that we have some net DPS impact uh on our bottom line.
the other is, uh,
um, per wind. We have a strengthening Innovation pipeline versus this year, fairly significantly. Um, we also have, uh, improving brand programs and in terms of new advertising, packaging and rollouts to more markets,
So what has been driving that share growth for us? Uh we see accelerating across more categories Brands and geographies with even more innovation.
And Stephen appreciate the questions.
and the next question comes from the line, uh, Daniel bielski with
Hedgehog. Please go ahead.
Uh good morning. So regarding the 110 basis, points of gross margin pressure in the quarter. It sounds like that was mostly sales, de-lever and mix and it doesn't sound like it was related to input costs or competitive price changes and is that right?
Yes, that's correct.
And and then the um the margin impact that you're expecting from tariffs of 40 to 50 million dollars is that that and that's before mitigation efforts but will there be a lag in terms of like when you're taking a higher prices? And and when you're going to incur those costs,
well, so
uh, we do not expect a line so it's really highlighted. We we have already, you know, since the beginning of the year being working on that and we expect a third of that coming from, you know, price and the remaining through the different manufacturing actions that we're doing either new sourcing or looking for other suppliers there. So that has been in Flight already. So we already see some, you know, impact on the margin taking place in in, in, uh, Q4. But offset the the serious compartment on pricing and that also continuing to 2026.
Okay. And do you think that there's going to be any changes in that, you know, competitively where, you know, certain manufacturers, imported or or source of domestically will that have any sort of, you know, share changes that you expect in 26?
Well, you know, it's been a very Dynamic, you know, scenario with the recent also, uh, announcement with on the China terrorists, right? So we continue to evaluate that but uh, you know, as we continue to see our strong position and significant us manufacturing, you can see that translating into our share gains, right? So um, because of our strong position that we have in the marketplace, we continue to expect that to accelerate into 2026 as we drive more strategic Partnerships and Joint business plans with our key retailers because they want us to help them grow. You know, and in moments like that where consumers are trading down. They want to make sure there is enough optionality with store brand, and that's where we believe we can really add a lot of value into that. So I don't know Patrick, any any comments then
Hey sweetie.
And that is all the questions that we have. At this time, I would like to turn it back to Patrick Lockwood with Taylor for closing remarks.
Thank you very much and thank you for those questions and again, for joining us today. So, just a few closing remarks from me.
Obviously, first of all, this is a very difficult Market condition with much softer consumption than anyone could have reasonably predicted. We've had to Pivot within that,
Within that context, though, we're starting to win. This is the first time in many years that we're growing share and we're growing it at a rate. That's ahead of our expectation.
But our financial performance and the context of soft market conditions. Um, and our infant formula, uh, position and performance is frankly not where we wanted to be.
We'll continue to make adjustments to address that.
And set up a successful 2026.
We've launched an announcement day strategic review of our infant formula business.
This is to show up and focus on our scalable OTC platform. And of course, any impact to our 2027 Outlook given that strategic review will be shared once the review concludes
As I've mentioned, we remain committed to deleveraging targeting below. 3.5x with a democracy, going to debt reduction,
We have a significant growth opportunity ahead of us by expanding our unparalleled molecule asset base across more price points, Brands and markets.
We're further, deepening our strategic retail Partnerships to drive. Mutual demand.
And our investments in brand building, innovation, digital, and analytics are fueling our increasingly winning formula.
Return.
Again, many thanks for joining us today.
Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining you may now disconnect