派瑞格 (PRGO) 2026 年第三季財報電話會議：嬰兒配方奶粉交易後更新財測指引

派瑞哥 (Perrigo Company plc) (NYSE: PRGO) 公布 2026 年第三季核心業務持續呈季增改善趨勢，儘管歐洲需求較弱、零售商庫存佈局謹慎，以及委託製造出貨量下降，仍持續對營收與毛利率帶來壓力。在達成出售嬰兒配方奶粉業務的協議後，該公司亦更新了 2026 年的展望。

重點速覽

• 核心淨銷售額年減 1.7%，相較於第一季下降 8.3% 及第二季下降 3.1% 有所改善。核心有機淨銷售額下降 1.1%。
• 核心調整後營業利益率達 14.3%，高於第一季的 12.8% 與第二季的 13.0%，但年減 210 個基點。
• 總淨銷售額為 9.89 億美元，下降 5.2%。資產剝離與嬰兒配方奶粉銷售額下滑合計造成 3.2% 的逆風。
• 派瑞哥在美國通路自有品牌非處方藥 (OTC) 的市占率提升 30 個基點，單季銷量成長 2%。歐洲主要品牌的銷售金額成長 6.5%，市占率提升 80 個基點。
• 營運提升計畫今年迄今已節省 4,200 萬美元，並維持在 2026 年實現約 6,000 萬至 8,000 萬美元節省額的軌道上。
• 管理層更新了 2026 年核心業務展望，預計列報淨銷售額下降 2.5% 至 3.6%，調整後稀釋每股盈餘 (EPS) 為 2.15 美元至 2.35 美元。

關鍵財務數據

較疲軟的消費環境與零售商較為審慎的庫存佈局，估計帶來約 2 個百分點的成長逆風。委託製造出貨量下滑則增加了大約 1 個百分點的壓力。創新與市占率提升則貢獻了約 1.5 個百分點的成長。

由於收益的管轄區組合所致，第三季調整後有效稅率為 3.5%，為核心調整後每股盈餘貢獻約 0.10 美元。本季包含今年迄今的稅務追溯補計。

業務與營運表現

個人護理 (Self Care) 淨銷售額下降 3.2%，主因是上呼吸道、止痛與助眠產品銷售疲軟，以及委託製造出貨量下降。健康生活方式 (Healthy Lifestyle) 受益於通路自有品牌尼古丁替代療法的市占率提升，而消化健康 (Digestive Health) 則受到通路自有品牌瀉藥出貨量增加的支撐。

專科護理 (Specialty Care) 淨銷售額下降 4.6%。女性健康 (Women's Health) 受益於 ellaOne 市占率提升及 Opill 持續成長。Compeed 與 Jungle Formula 表現出強勁的季節性業績，但這些成長被通路自有品牌與委託製造的敏諾西代 (minoxidil) 銷售額下降以及 Mederma 銷售額減少所抵銷。

嬰兒配方奶粉淨銷售額下降 9.6%。通路自有品牌配方奶粉的成長被委託製造出貨量減少與出貨時程影響所抵銷。該業務的調整後營業收益微幅呈負數，其中包含預期的製造產能吸收不足。

派瑞哥在美國通路自有品牌 OTC 的出貨量增加 2%，市占率提升 30 個基點。在歐洲，主要品牌的銷售金額成長 6.5%，市占率提升 80 個基點。

電子商務仍是重點領域。今年迄今，美國電商品類出貨量成長近 15%，而該管道占派瑞哥美國總出貨量的 22%，相較於 2022 年的約 13% 有顯著提升。

該公司正在將投資導向創新、通路擴展與需求創造。相關舉措包括針對使用 GLP-1 產品的消費者定位其消化健康產品組合，並支持 Compeed、Opill、ellaOne 和 Jungle Formula 等品牌。

管理層業績指引

自第四季及 2026 全年財報起，嬰兒配方奶粉將被歸類為停業單位。核心業務展望已排除嬰兒配方奶粉與先前宣布的資產剝離，而修訂後的總體展望則排除嬰兒配方奶粉，但包含其他資產剝離。

對於核心與總體結果，管理層假設淨利息支出約為 1.62 億美元，調整後有效稅率約為 14%，稀釋後流通股數約為 1.4 億股。預計年底淨槓桿率約為調整後 EBITDA 的 4 倍。

總營運活動現金流預計將達到調整後淨收益的 60% 出頭至 65% 左右區間。管理層表示，修訂後的展望反映了咳嗽與感冒季節前零售商謹慎的庫存佈局，以及歐洲消費環境持續軟弱。

風險與關注領域

• 在連續兩個季度該品類銷量疲軟後，零售商進入咳嗽與感冒季節時的備貨庫存較低。
• 管理層表示，早期有利的發病率與消費趨勢可能會推動補貨，但時間點可能落在 2026 年第四季或 2027 年第一季。
• 歐洲消費者需求仍低於該公司先前預期。
• 出貨量下降與不利的產品組合（特別是來自毛利率較高的歐洲業務），對毛利率和營業利益率造成壓力。
• 較高的廣告與促銷支出增加了營業費用，但部分被成本節省所抵銷。
• 管理層將通膨、稅率正常化以及一次性關稅優惠到期列為 2027 年的考量因素。

分析師問答重點

管理層表示對口腔護理 (Oral Care) 業務的戰略評估仍持續進行中。嬰兒配方奶粉與口腔護理是目前作為整體業務進行評估的兩項資產。該公司意在簡化產品組合、改善利潤率、強化資產負債表，並將投資集中在能提供較強風險調整後回報的領域。

第三季關稅回收收益約為 450 萬美元。管理層將其描述為一次性收益，不會持續至 2027 年。

管理層表示，計畫出售嬰兒配方奶粉業務移除了在 2026 年消耗現金的業務，並應能大幅降低未來的資本需求。派瑞哥先前曾規劃高達 2.4 億美元的潛在投資以優化嬰兒配方奶粉網絡，過去兩年僅完成了一小部分。

據描述，零售商在第三季並未主動削減咳嗽與感冒藥庫存，而是未將庫存建立至歷史季節性水準。派瑞哥表示，若季節性需求增強，公司已做好準備支援補貨，儘管時間點仍存在不確定性。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good morning ladies and gentlemen, and welcome to the Perrigo Third Quarter 2026 Financial Results Conference Call.

[Operator Instructions] This call is being recorded on Wednesday, November 4, 2026. I would now like to turn the conference over to Eric Jacobson, Vice President, Global Investor Relations. Please go ahead, sir.

Eric Jacobson

Good morning, and good afternoon, everyone. Welcome to Perrigo's Third Quarter 2026 Earnings Conference Call.

A copy of the release we issued today and the accompanying presentation are available within the Investors section of the perrigo.com website. Joining today's call are Perrigo's Interim President and CEO, Albert Manzone; and CFO, Eduardo Bezerra.

As a reminder, we recently announced an agreement to divest our Infant Formula business. Beginning with the fourth quarter and full year 2026 reporting, the Infant Formula business will be reported as discontinued operations. Accordingly, the company's all-in outlook no longer includes Infant Formula. The company's Core outlook continues to exclude Infant Formula and previously announced divestitures.

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. See the appendix to the earnings presentation for additional details and reconciliations of all non-GAAP to GAAP financial measures presented.

Moving to the agenda. Albert will begin with his perspective on Perrigo and the priorities he has identified. He will then discuss our third quarter performance, progress against the Three-S plan and the commercial opportunities he sees to drive stronger, more consistent growth. Eduardo will then provide a financial review and discuss our 2026 outlook.

With that, I'll turn it over to Albert.

Albert Manzone

Thanks, Eric. Good morning, good afternoon, and thank you for joining today's call.

Over my first 5 months at Perrigo, I have spent a significant amount of time listening to our customers, our consumers and our people, digging into the business and our capabilities and developing a deeper understanding of what we do well and where we can be better. And I have been increasingly impressed. We have leading store brand products, strong brands, attractive positions across our categories and a talented organization that knows the Consumer Self Care business exceptionally well. I want to thank our teams across Perrigo for their hard work, commitment and the way they have welcomed me. At the same time, it has become clear why those strengths have not translated consistently into the results we should be delivering.

Over time, Perrigo has become too complex. The business has not been integrated to the degree it needs to be, and that complexity has made it harder for our teams to execute with the necessary speed and focus. We are taking decisive action to simplify and strengthen Perrigo, and that process is a major focus for me. That means being extremely deliberate about where we invest, the businesses and geographies where we play and how we organize ourselves. We want our talented teams focused on the areas where Perrigo has the greatest right to win and where we see the most attractive risk-adjusted returns. This work is underway, and you will hear throughout today's call how we're sharpening our focus, simplifying the business and positioning Perrigo to deliver more consistently over time.

Looking at our key takeaways from the quarter. First, our Three-S plan is working. There is more to do, but operating performance improved sequentially, and we're making progress in the areas we control. The sale of Infant Formula is an important step. It simplifies our portfolio and operations, improves our margin profile, reduces expected future capital expenditures and allows us to focus our people and resources where we have the greatest right to win. And competitively, we gained share again in U.S. store brand OTC and across our key European brands. Category trends also continued to improve sequentially, even as the consumer environment remains challenging in certain areas.

Finally, we have updated our 2026 outlook to reflect the Infant Formula divestment, more measured retailer inventory positioning ahead of the cough and cold season and continued softness in Europe. While cough and cold incidence trends have shown early signs of improvements, retailers have taken a more measured approach to inventory. Eduardo will take you through the details later in the call, including the key drivers underlying our expectations for the balance of the year.

Turning briefly to our third quarter financial results. As you can see, our results continue to reflect some of the ongoing challenges we have discussed, including retailer inventory positioning and lower contract volumes. The key takeaway for me is straightforward. The areas we control are improving even as external headwinds continue to weigh on the reported results. You can see that more clearly in the sequential trends. Our operating performance has improved each quarter this year. The year-over-year decline in Core net sales has moderated from 8.3% in the first quarter to 3.1% in the second quarter to 1.7% in the third quarter. At the same time, Core adjusted operating margin continued to trend upward, increasing from 12.8% to 13.0% to 14.3%. That is meaningful progress. Category trends are improving, and the actions we're taking through our Three-S plan are having an impact.

Our job now is to build on it, continue simplifying Perrigo and translate that progress into more consistent results. In addition to the sequential improvement in our operating performance, we're seeing the category environment improve as well. As you can see, consumption trends have strengthened from the beginning of the year in both the U.S. and Europe. In the U.S., category volume returned to modest growth in the third quarter, while in Europe, consumer trends remain soft, but the rate of decline continued to improve sequentially, and so is our execution.

Turning now to the details of our recent progress. Under Stabilize, operations are becoming more consistent and service is improving, which is strengthening our relationships and increasing collaboration with our retail customers. Under Streamline, we're making clear choices about where Perrigo should compete. We have sold Dermacosmetics and announced the divestment of Infant Formula, while continuing the strategic review of Oral Care, and we're taking cost out. Our operational enhancement program has generated $42 million of savings year-to-date and remains on track to deliver approximately $60 million to $80 million in 2026. Under Strengthen, we're putting more investment behind innovation, demand generation and the parts of the portfolio where we see the greatest opportunity. And we're seeing the results in our share performance in U.S. store brand OTC and across our key European brands.

As we simplify Perrigo, we can enhance our focus on driving growth. These are 3 areas where I see clear opportunities. First, innovation. We're directing innovation resources on categories where we have a right to win and where differentiated products can create meaningful value for consumers and customers. Second, distribution. Store brand is a CORE Perrigo strength, and we have opportunities to put more of our products in front of more consumers. That includes e-commerce, where our market share is already higher than in the total market. I will come back to that shortly. Third, demand generation. We're investing behind the brands, products and customer programs where we believe we can generate attractive returns. That means stronger customer partnerships, and more effective consumer engagement. The objective is simple: gain share and outgrow our categories.

Let me bring some of those growth building blocks to life with a few examples. In store brands, we continue to find new ways to support consumers and create value for our retail partners. Our GLP-1 activation is a good example where we are positioning our Digestive Health portfolio to support consumers along their GLP-1 journey while deepening our strategic relationship with customers. Importantly, initiatives like this one shift more of our business into faster-growing parts of the category. At the same time, our investments behind key brands are translating into strong growth and share performance. Compeed, Opill, ellaOne, Jungle Formula all delivered growth and gained share, demonstrating the opportunity we have when we put focused investment behind differentiated brands. These examples demonstrate the strength of both sides of Perrigo. We have a differentiated store brand portfolio and brands with meaningful growth opportunities.

As I mentioned earlier, e-commerce is a particularly attractive opportunity for Perrigo. The channel is growing faster than the broader category, and our share in e-commerce is higher than our share of the total market. That matters. As more consumer purchasing moves online, we should benefit to a greater extent. And we're seeing it already. U.S. e-commerce total category volume is up nearly 15% year-to-date, and e-commerce now represents 22% of our U.S. volume, up from approximately 13% in 2022. We have a strong position in a growing channel. Our job is to build on it. The clearest evidence that the Three-S plan is working is our share performance. In U.S. store brand OTC, volume grew 2% in the quarter, and we gained 30 basis points of share. In Europe, value sales in our key brands grew 6.5%, well ahead of their categories and gained 80 basis points of share. Those are important proof points. We have more opportunity in front of us, but where we are investing and executing well, we're winning.

Let me close with where I am focused. We need to build on the share momentum we're seeing and continue expanding access to high-quality affordable self-care products. We need to keep simplifying Perrigo. The sale of Infant Formula is an important step and there is more to do. We need to strengthen the balance sheet and create a greater financial flexibility. To ensure our capital allocation framework remains aligned with our strategy and market opportunities, we regularly review the most effective uses of capital across growth investments, debt reduction and shareholder returns, including assessing the dividend on a quarterly basis, and we need to deliver. We have work ahead of us, but I believe we have the portfolio, the capabilities and the people to do it.

With that, I will turn it over to Eduardo to walk through the financial results in more detail.

Eduardo Bezerra

Thank you, Albert. I appreciate everyone joining us today. Other than for references to net sales, my comments will focus on adjusted non-GAAP results unless otherwise noted.

Turning to our Q3 results, starting with the top line. Core net sales declined 1.7% year-over-year, while Core organic net sales declined 1.1%. Importantly, as Albert highlighted, this marks another quarter of sequential improvement, reflecting both continued execution of our Three-S plan and improving category trends across several of our key markets. Third quarter results continue to reflect a softer consumption environment. The softness, which was particularly evident in our European business, contributed to more measured retailer inventory positioning ahead of the cough and cold season within the Self Care segment. These factors represented approximately a 2 percentage point headwind to growth. Lower contract manufacturing volumes created an additional headwind of roughly 1 percentage point.

Encouragingly, our growth building initiatives continue to gain traction, offsetting a meaningful portion of those pressures. Innovation and market share growth contributed approximately 1.5 percentage points of growth during the quarter. While the external environment remains challenging, these actions reinforce our confidence in the underlying trajectory of the business. Within Self Care, net sales decreased 3.2%. The decline was concentrated in upper respiratory and pain and sleep categories, where softer consumption contributed to more measured retailer inventory positioning. Lower contract manufacturing volumes also weighed on results. These factors were partially offset by growth in Healthy Lifestyle, supported by continued share gains in store brand nicotine replacement and in Digestive Health, where store brand laxative volumes increased.

Specialty Care net sales decreased 4.6%. Women's Health continued to perform well, led by share gains and solid momentum in ellaOne, along with continued growth from Opill. Within Skin Health, Compeed and Jungle Formula delivered strong in-season performance, but that growth was more than offset by lower store brand and contract manufactured minoxidil sales and lower Mederma sales. On an all-in basis, net sales were $989 million, down 5.2%. In addition to the core drivers I just discussed, all-in results also reflected the impact of divestitures and lower Infant Formula sales, which together represented a 3.2% headwind. Infant Formula net sales decreased 9.6% as growth in store brand formula was more than offset by lower contract volumes, including the timing of certain shipments that were recorded in the second quarter. Currency translation was a headwind of 0.5 percentage points.

Now to adjusted operating income. Self Care adjusted operating income decreased $25 million or 19.4%. The decline was driven primarily by lower sales, particularly in our higher-margin European business, which resulted in an unfavorable mix along with increased advertising and promotional investment. Benefits from the operational enhancement program partially offset those pressures. Specialty Care adjusted operating income decreased $10 million or 24.2%, reflecting unfavorable mix in Skin Health and higher advertising and promotion investment across the segment.

These investments continue to support the consumer programs and innovation activity Albert discussed, while operational enhancement program savings provided a partial offset. Infant Formula adjusted operating income decreased by approximately $15 million and was slightly negative in the quarter. Lower sales and gross profit flow-through, including planned under-absorption, were partially offset by lower operating expenses. Within All Other, adjusted operating income increased approximately $4 million or 18.4%. Results benefited from the recognition of a recovery of a portion of previously paid tariffs, along with improved productivity and lower operating expenses in Oral Care. Those benefits more than offset the impact of divestitures. Corporate expenses improved modestly year-over-year, reflecting continued cost discipline and benefits from the operational enhancement program, partially offset by the normalization of variable employee compensation.

Turning to margins. The drivers were consistent with the segment results I just reviewed. Core adjusted gross margin declined 140 basis points to 37.9%, driven by lower net sales volumes and unfavorable mix from lower sales in our higher-margin European business, partially offset by the benefit of tariffs and the contribution from continued market share gains. Core adjusted operating margin decreased 210 basis points to 14.3%. In addition to the gross margin pressure, operating expenses increased primarily due to higher advertising promotion investment and the normalization of variable employee compensation. That increase was partially offset by operational enhancement program benefits of $19 million. All-in adjusted gross margin declined 370 basis points to 36.3%, reflecting the core drivers as well as the impact of divestitures and lower Infant Formula gross margin, including planned under-absorption.

All-in adjusted operating margin decreased 360 basis points to 13.1%, reflecting those same items and the impact of Infant Formula and divestitures. Third quarter Core adjusted earnings per share was $0.61, down $0.06 from the prior year. Lower sales and operating income were partially offset by a lower adjusted effective tax rate. Changes in the jurisdictional mix of earnings reduced the adjusted effective tax rate to 3.5% and benefited Core adjusted earnings per share by approximately $0.10 in the quarter. The Q3 tax rate benefit included a year-to-date catch-up to reflect the updated jurisdictional mix of earnings. All-in adjusted diluted earnings per share was $0.60, down $0.20 from the prior year. In addition to the Core drivers, all-in earnings per share reflected the impact of divestitures and Infant Formula, including approximately $0.12 of unfavorable earnings per share impact from planned under-absorption within Infant Formula.

Turning to cash flow. Third quarter 2026 cash from operating activities was $96 million, in line with our expectations. Capital expenditures totaled $18 million, and we returned $40 million to shareholders through dividends.

Turning to the balance sheet. Cash and cash equivalents were $437 million and total debt was $3.3 billion. Subsequent to quarter end, we announced an agreement to divest the Infant Formula business. Net proceeds are expected to be deployed in line with our capital allocation priorities, including sustainable business growth, reducing total debt and net leverage and maintaining a disciplined and balanced capital allocation framework.

Turning to our outlook. As Eric mentioned at the beginning, going forward, the Infant Formula business will be presented as discontinued operations. Starting with Core, we now expect reported net sales to decline 2.5% to 3.6% with organic net sales declining 2.7% to 3.8%. We expect adjusted gross margin of 37.5% to 38.5%, adjusted operating margin of 14.0% to 15.0% and adjusted diluted earnings per share of $2.15 to $2.35. For all-in, which now excludes Infant Formula, but includes other divestitures, we expect reported net sales to decline 4.6% to 5.7%. With Infant Formula now accounted for in discontinued operations, we expect a benefit to adjusted gross margin and operating margins compared to our previous all-in outlook. We now expect adjusted gross margin of 37.8% to 38.8% and adjusted operating margin of 14.3% to 15.3%.

All-in adjusted diluted earnings per share is expected to be between $2.25 and $2.45. For both Core and all-in, we assume net interest expense of approximately $162 million and an adjusted effective tax rate of approximately 14% for the year and approximately 140 million diluted shares outstanding. We also expect year-end net leverage of approximately 4x adjusted EBITDA. All-in cash from operating activities as a percentage of adjusted net income is expected to be in the low to mid-60% range.

The change to our outlook reflects 2 primary factors: more measured retailer inventory position heading into the cough and cold season and continued softness in the European consumer environment. While cough and cold incidence trends have been tracking favorably early in the fourth quarter, retailers are taking a more conservative approach to inventory levels following 2 consecutive seasons of softer category volumes. As a result, we saw lower retailer inventory build in the third quarter than previously assumed, which impacts our sales outlook despite encouraging early units and tracked channel consumption trends. In Europe, the consumer environment remains challenging and is tracking below our prior expectations.

As a result, we believe it's prudent to take a more measured view for the balance of the year. Our operating assumptions continue to incorporate benefits from market share gains, innovation, distribution expansion, demand generation activities and productivity benefits from our operational enhancement program. As we move into the fourth quarter, we remain focused on converting our market share gains and commercial investments into sales, managing costs with discipline and executing against our updated outlook. While we remain mindful of the uncertain consumer environment and potential for variability in seasonal incidence levels, we believe the actions we're taking position Perrigo to exit 2026 as a simpler and more focused consumer self-care company.

Before I turn the call to Eric, I want to thank all our colleagues across Perrigo for their continued focus, commitment and diligent execution. Eric?

Eric Jacobson

Thank you, Eduardo. Operator, we're now ready for questions.

Operator

[Operator Instructions] Your first question comes from Susan Anderson with Canaccord Genuity.

分析師問答

Susan Anderson

Congrats on the Infant Formula sale. I guess, now with that Infant Formula sold, maybe just looking bigger picture, I guess, how are you thinking about the strategy of the business? Has anything changed there? Is Oral Care still planned to be sold? And where are you at with that business? And then are there any other areas of the business that you think would make sense to divest? And then if there's just any update to your strategy for the store brands and branded part of the business?

Albert Manzone

Susan, thank you for the question. I hope you are well. And listen, we're, as you said, satisfied with the sale of Infant Formula. With regard to Oral Care, the process is ongoing. And at this point, those are the 2 assets that we are reviewing as a whole. What that means for us, as I said in my notes earlier, is really the ability to focus, simplify the company and really focus on driving growth, improving our margins and doing a disciplined allocation of capital. This is, I think, from a strategic standpoint, the big opportunity that we do have. And I think over the coming quarters, you are going to see more of that. We are very satisfied with the market share gains that we're demonstrating and showing progress in the areas we control with regard to this quarter.

And we continue to look at continuing to do better going forward. Strategically, there are areas that I think are very promising when you look at our sales performance, innovation and focusing our innovation on where we get the best value for our brands, capturing the e-commerce opportunities. And as you have seen in the presentation, we have a higher market share in a category that is growing and also already representing 20% of our sales in the U.S. So I think we're going to double down on that focus with the organization going forward.

Susan Anderson

Okay. Great. And then maybe if I could just follow up on the market share gains in the quarter. I guess maybe if you could talk more specifically about the categories where you're gaining share, both in store brands and then separately in your branded business. I guess, are you seeing the gains across the entire portfolio? Or are there certain categories or brands where you're seeing the most market share gains?

Albert Manzone

Yes, great question. If you look at the U.S., we're doing well across most of the categories. And this is -- as you know, we're putting a lot of focus on really building the business with the retailer. I talked to you at the last quarter, and this is part of sequential improvements about improving our service levels to those retailers and with our key retailers who are 95% and above. And we are continuing to do that. That allows us, as I said earlier last quarter, to sit down with those retailers and co-innovate with them and also creating demand generation. And we do have a number of tests going on in terms of generating demand generation for the store brand.

And so that growth is consistent across, a little bit less on the oral electrolytes and skin health, mostly there due to one brand, minoxidil. But on all the others, you are seeing a progress. You are also seeing new opportunities as, for example, we are bundling together Digestive Health for GLP-1 consumers, and we're rolling this out across a number of retailers as we speak. You know that we're gaining share within the store brands, but we also do see opportunities to gain share as a total store brand business on behalf of the retailers. This is something that they are interested to develop. This is something that I think the consumer is looking at. And as I was telling you earlier, when you look at e-commerce and when you look at the agents, you can imagine easily that an AI agent is at some point going to recommend a brand that costs a lot less that has exactly the same FDA ingredients.

So those are opportunities that we carry forward that allow us to gain share. And what you see in Europe is also share gains across all our significant, I would say, bigger brands. And so there, we're doing well. We need to make sure that we support more broadly some of the other brands, and we have sometimes in Europe a leaky bucket. And this is an area of focus of mine going into some of those brands, which have potential with a little bit of support. And so that's the market share trends and overall position in Europe can continue to grow as we go forward.

Operator

Your next question comes from Chris Schott with JPMorgan.

Ethan Brown

This is Ethan, on for Chris Schott. Congrats on the quarter. Just starting off, as we look maybe to 2027 and given the number of moving pieces in the business, how are you thinking about the key pushes and pulls? And as part of that, can you quantify the benefit from the tariff reversal this quarter?

Albert Manzone

Yes. Ethan, as you may guess, I'm going to be talking less about 2027, and you will hear more about this in the next quarter. But let me maybe give you some of the positives as I look at '27 and some of the watchouts. I think on the positive side, you are going to see an improving of the absorption on OTC, which, as you remember, was negatively impacted the first half of 2026. You are going to continue to see operational enhancement programs, which we are working on and feel comfortable about. And we are continuing -- you are going to see the margin improvement from the divestment of Infant Formula in 2027.

The watchout, and it shouldn't surprise you there, is that, obviously, the Dermacosmetics divestiture has taken place. You will see a normalization of the tax rate, which, as you know, has been positive this year due to the jurisdictions where it took place. The onetime benefit on the tariffs is going to go away. And we continue to see, of course, inflationary pressure, and those will be coming still in 2027. Together with that, we are going to make sure, as I have said in my opening statements, that we invest where it does matter behind our brands, behind innovation, demand generation. The key for us is going to grow the business next year, and that's what we intend to do.

Eduardo Bezerra

And Ethan, regarding your question on tariffs. So for Q3, the benefit of tariffs was about $4.5 million, okay?

Ethan Brown

Perfect. That's super helpful. And then one other question for me would just be following the Infant Formula divestiture, how are you thinking about kind of the company's broader cash flow going forward and maybe in particular, the magnitude of impact on CapEx that this divestiture will have?

Albert Manzone

Yes, Ethan. Eduardo, do you want to take this one?

Eduardo Bezerra

Yes. So Ethan, I think there are a couple of things there. First, as we mentioned when we set guidance this year, that Infant Formula was consuming cash because of the performance of this year. So I think with this divestment, we removed that uncertainty. And also, as you remember, a couple of years ago, we mentioned that we would make significant investment to optimize our overall network and footprint. At that time, we announced potentially $240 million. We did a small portion of those investments over the past 2 years to make sure we kept the operations ongoing and finalize some of the previously committed investments, but it's going to be a significant reduction on our capital requirements going forward.

So the positive on that side is we're going to be able to shift the focus to our Core OTC business, right? So as we see opportunities on investing in different areas that we believe is going to bring us a better potential return and more aligned with our ongoing Core strategy.

Operator

Your next question comes from Daniel Biolsi with Hedgeye.

Unknown Analyst

Machado Rodriguez, on for Daniel. So you highlighted more cautious inventory positioning ahead of cough and cold season. And just to clarify, are retailers actively reducing inventories again? Or are they just simply not rebuilding ahead of the season?

Albert Manzone

Yes, thank you for the question. Good one. I would say that going into Q3, we didn't see the retailer, as you said, it's the second piece of your assumption. They didn't load it for the season as they could have done or they did in the past. The season start -- seems to be moving more into the year as climate change and so on and so forth. And so that's what you have seen. So as a result, as far as we're concerned, we continue to see a season that is -- should be better than last year, but maybe not as high as originally estimated.

That being said, I think it's too early to tell because as we talk, the climate is getting colder, more people are getting sick. We saw some positive trends in October coming from the Southwest of the U.S. In Europe, you start to have cold season coming. That -- so we're ready for replenishment, no issue there. And then the question is really, is it going to impact the Q4? Is it going to impact the Q1? As again, this season seems to be shifting in terms of the calendar.

Unknown Analyst

Okay. Great. And then just a follow-up on that. So do you see an opportunity for restocking to be a tailwind for sales? Or do you think retailers are going to maintain lower inventory levels going forward?

Albert Manzone

I think that if the season picks up, which is still to be determined, you are going to see replenishment. And what, again, I cannot tell you is whether that replenishment is going to hit more into Q4 or into Q1 of next year.

Operator

There are no further questions at this time. I will turn it back to Mr. Manzone for some concluding remarks.

Albert Manzone

Thank you, Anas, and thank you all for joining and for your questions.

Operator

Ladies and gentlemen...

Albert Manzone

No, no, I just wanted to add something if you allow me, which is I just wanted to give you some reflection about what I've come to see in this company over the past 5 months. Perrigo holds a position that is hard to replicate. We are the leader in U.S. store brands OTC. We own a portfolio of leading brands in Europe. Very few companies can serve consumers across brands, store brands, categories and price points the way we do. That gives us the ability to capture demand as consumer preferences shift. We're gaining share on both sides of the Atlantic, and e-commerce is driving further improvement. Our share in e-commerce is already higher than our share in the total market. And as more purchasing moves online, we should benefit to a greater extent.

What has held this company back is not the assets. It is complexity. That's what we are taking out quarter-by-quarter. There is real work ahead to simplify Perrigo, execute with greater consistency and optimize our capabilities and assets to drive stronger performance. We know what we have to do. We're doing it, and I am confident in where we are headed.

Thank you all for your continued interest in Perrigo.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.