Nov 5 (Reuters) - Perrigo ( PRGO ) said on Wednesday it

has initiated a strategic review of its infant formula business

as the consumer health company shifts its focus to higher-margin

branded products.

The company is a top supplier of store-brand baby formula,

which is sold under retailers' labels and can cost less than

branded products.

The infant formula unit has struggled with quality concerns

at its manufacturing facilities that posed contamination risks.

In 2023, Perrigo's ( PRGO ) Wisconsin unit received a warning letter

from the U.S. health regulator to correct its manufacturing

processes to better catch bacterial contamination.

The strategic review will focus on increasing cash flows,

reassess a previously announced $240 million investment in the

unit and evaluate other potential options, Perrigo ( PRGO ) said, adding

that no final decisions have been made and there is currently no

set timeline for completing the review.

"While our infant formula operations have stabilized, the

external environment has quickly changed, making a fit with our

consumer health OTC businesses less strategic," CEO Patrick

Lockwood-Taylor said.

Perrigo ( PRGO ) on Wednesday trimmed its full-year profit forecast

to a range of $2.70 to $2.80 per share, down from $2.90 to $3.10

per share previously, citing challenges in the infant formula

industry and soft demand for its over-the-counter products.

Shares of the company fell nearly 16% in premarket

trading.

The company said it expects the infant formula business to

generate about $360 million revenue this year, which is less

than 10% of Perrigo's ( PRGO ) net sales in 2024.

Perrigo's ( PRGO ) branded products include children's oral care

brand Firefly, Mederma for scar removal and Coldrex for cough

and allergy care.