It has been about a month since the last earnings report for Perrigo (PRGO). Shares have lost about 15.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Perrigo due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Q1 Earnings Top, Sales Lag Estimates

Perrigo reported adjusted earnings of 29 cents per share in the first quarter of 2024, beating the Zacks Consensus Estimate of 24 cents. Earnings declined 35.6% year over year, primarily due to a negative financial impact of 30 cents per share for actionsto augment and strengthen the company’s infant formula business.

Net sales declined 8.4% year over year to $1.08 billion, missing the Zacks Consensus Estimate of $1.09 billion. The downside was due to lower net sales in infant formula and the negative impact of purposeful SKU prioritization actions to enhance margins as part of the company's Supply Chain Reinvention Program undertaken in 2022.

During the quarter, sales declined 1.2% on account of exited product lines and 0.3% due to unfavorable currency movement. At constant currency (excluding foreign currency translation), sales fell 8.2%. Organic net sales (excluding the effects of acquisitions and divestitures and the impact of currency) declined 7.0% year over year.

Segment Discussion

CSCA: The segment’s net sales in the first quarter of 2024 came in at $644.1 million, down 15.7% year over year. The downside was caused by inventory de-stocking at U.S. retail customers, which resulted in lower net sales of store brand offerings across most product categories.

CSCI: The segment reported net sales of $437.9 million, up 4.7% from the year-ago period’s levels. Segment revenues benefited from growth in net sales of Skin Care and Women's Health categories, strategic pricing actions and new products. At constant-currency rates, sales were up 5.5% year over year. Organically, sales increased 7.0%.

2024 Guidance

Perrigo reiterated its previously issued financial guidance for 2024. Management expects total net sales growth to be flat year over year. Adjusted earnings per share (EPS) are expected to be between $2.50 and $2.65.

The adjusted tax rate is expected to be around 20.5%. Perrigo expects to record interest expenses of about $180 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.