Perrigo Company plc reported a decline in net sales for the third quarter and the first nine months of fiscal 2024, with net sales of $1,087.5 million for the three months ended September 28, 2024, down from $1,123.8 million in the same period of 2023. For the nine months, net sales totaled $3,235.1 million, a decrease from $3,498.7 million year-over-year. The decline in sales was attributed to lost distribution of lower-margin products, particularly in the U.S. Store Brands, and reduced sales in key categories such as Oral Care and Pain & Sleep Aids. The divestiture of the Rare Diseases Business also contributed to the sales drop.
Despite the decrease in sales, Perrigo's operating income for the third quarter increased to $80.4 million, compared to $62.1 million in the prior year, driven by strategic pricing actions and improved productivity in the infant formula segment. However, for the nine-month period, the company reported an operating loss of $1.3 million, a significant decline from the $167.5 million operating income recorded in the same period of 2023.
Net income for the third quarter was a loss of $21.0 million, compared to a profit of $14.2 million in the prior year. For the nine months, net income was a loss of $127.3 million, down from a profit of $19.6 million in 2023. The losses were influenced by increased interest expenses and restructuring charges related to the ongoing Project Energize initiative, which aims to achieve annualized savings of $140 million to $170 million by 2026.
Perrigo's total assets increased to $11,203.2 million as of September 28, 2024, up from $10,809.1 million at the end of 2023. Current assets also rose significantly, driven by an increase in cash and cash equivalents, which reached $1,463.5 million. However, total liabilities also increased, with long-term debt rising to $4,312.6 million from $3,632.8 million at the end of 2023.
Strategically, Perrigo completed the sale of its Rare Diseases Business to Esteve Healthcare for $244.5 million in July 2024, which resulted in a pre-tax gain of $5.8 million. The company also signed an agreement to sell its Hospital & Specialty Business, with completion expected in November 2024. Leadership changes included the appointment of Dr. David Ball as Executive Vice President and Chief Brand and Digital Officer and Charles Atkinson as Executive Vice President, General Counsel, and Secretary.
Perrigo continues to navigate a challenging macroeconomic environment, with inflation and supply chain disruptions impacting its operations. The company is focused on enhancing its operational efficiency through its Supply Chain Reinvention Program and Project Energize, while also managing interest rate risks through various financial instruments.