PepsiCo, a global food and beverage giant, reported its quarterly results on Friday, revealing a decline in North American demand for its products. The company’s shares dropped more than 2% in premarket trading, indicating investor disappointment.
PepsiCo’s earnings per share came in at $1.78 adjusted, surpassing Wall Street’s expectations of $1.72. However, the company’s revenue fell short of analysts’ forecasts, with $27.85 billion compared to the expected $28.4 billion. Despite an increase in net income from $518 million to $1.3 billion compared to the previous year, the decline in revenue raised concerns.
PepsiCo attributed the weaker performance to a decline in both volume and sales. While the company’s organic revenue, which excludes acquisitions and divestitures, experienced a 4.5% increase, PepsiCo’s volume continued to slide. The North American Quaker Foods division witnessed an 8% decline in volume, primarily due to a voluntary recall of granola bars and cereals. Frito-Lay North America, which includes popular brands like Cheetos and Doritos, reported a 2% drop in volume. Additionally, PepsiCo’s North American beverage unit saw a significant 6% decline in volume.
PepsiCo revised its forecast for 2024, anticipating organic revenue growth of at least 4% and core constant currency earnings per share growth of at least 8%. The company’s previous estimate indicated organic revenue growth on the high end of 4% to 6% and core constant currency earnings per share growth in the high single digits. The revised outlook reflects PepsiCo’s cautious approach towards potential challenges in the market.
Since the release of the quarterly results, PepsiCo’s stock experienced a decline. The disappointment in the company’s weaker-than-expected performance led to a drop of more than 2% in premarket trading. Investors may have been concerned about the decline in North American demand, particularly in the company’s Quaker Foods and beverage divisions.
PepsiCo’s latest quarterly results revealed mixed performance, with higher-than-expected earnings per share but lower revenue compared to analysts’ estimates. The weakened demand for the company’s food and drinks in North America, particularly in its Quaker Foods division and beverage unit, raised concerns among investors. PepsiCo’s revised outlook for 2024 reflects a more cautious approach towards growth. The decline in the company’s stock price indicates investor disappointment with the quarterly results. PepsiCo will need to address the challenges affecting its volume and sales moving forward to regain investor confidence and drive future growth.
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