New York City – PepsiCo reported a mixed bag of quarterly results today, with international sales helping to offset weaker demand in North America. The company also revised its forecast for core constant currency earnings per share, citing factors such as tariffs, economic volatility, and a more cautious consumer sentiment.
CEO Ramon Laguarta expressed concerns regarding global trade developments causing increased supply chain costs and uncertainty in consumer conditions in various markets. As a result, the company’s shares fell by 2% in premarket trading.
Compared to analysts’ expectations, PepsiCo reported adjusted earnings per share of $1.48, slightly below the anticipated $1.49, and revenue of $17.92 billion, surpassing the expected $17.77 billion. The company’s first-quarter net income dropped to $1.33 per share from $1.48 per share the previous year, excluding certain charges and costs.
Despite a decline of 1.8% in net sales to $17.92 billion, PepsiCo reported a 1.2% increase in organic revenue, which excludes acquisitions, divestitures, and foreign currency impacts. The company experienced a 3% drop in worldwide volume for its convenient foods unit and stable sales for its beverages.
To address the challenges in its North American business, PepsiCo outlined plans to expand into multicultural and functional products, such as the recently acquired Poppi prebiotic soda brand. The company also aims to enhance consumer engagement and improve product availability and placement in stores.
Although facing some difficulties, PepsiCo found success in certain areas of its North American operations. Pepsi Zero Sugar contributed to gaining market share, while brands like Miss Vickie’s chips and Quaker’s rice cakes delivered net revenue growth.
Looking ahead, PepsiCo adjusted its full-year earnings forecast to be relatively unchanged from the previous year, down from the initial projection of mid-single-digit growth. The company reiterated its expectations for a low-single-digit increase in organic revenue for the year.
As developments unfold, stay tuned for further updates on PepsiCo’s performance and strategies to navigate the changing market dynamics.
