Bottles of Pepsi are seen at a grocery store in Las Vegas, the United States, on November 17, 2023.
Jakub Porzycki | Nurfoto | fake images
PepsiCo on Friday reported mixed quarterly results as North American demand for its food and beverages weakened.
The company's shares fell more than 2% in premarket trading.
Here's what the company reported compared to what Wall Street expected, according to a survey of analysts by Refinitiv:
- Earnings per share: Adjusted $1.78 vs. expected $1.72
- Revenue: $27.85 billion vs. $28.4 billion expected
Pepsi reported fourth-quarter net income of $1.3 billion, or 94 cents per share, down from $518 million, or 37 cents per share, a year earlier.
Excluding items, the food and beverage giant earned $1.78 per share.
net sales fell 0.5% to $27.85 billion. Currency exchange rates dragged net sales down 1.5%.
Pepsi's organic revenue, which excludes acquisitions and divestitures, rose 4.5% in the quarter, helped by higher prices. But those same high prices have hurt demand for the company's food and beverage products. Pepsi volume, which excludes pricing and currency exchanges, fell again this quarter.
PepsiCo executives said high borrowing costs and lower personal savings have squeezed consumer budgets, particularly in North America, in prepared comments released ahead of the company's conference call. They also said consumers are increasingly choosing smaller package sizes for convenience and lower prices.
Pepsi's North American Quaker Foods division reported an 8% drop in volume. A voluntary recall of its granola and cereal bars hurt its sales during the quarter, along with weaker growth for the category overall.
Frito-Lay North America, which includes brands such as Cheetos and Doritos, posted a 2% drop in volume.
Pepsi's North American beverage unit saw its volume drop 6% in the quarter.
For 2024, Pepsi now anticipates organic revenue growth of at least 4% and constant currency earnings per share growth of at least 8%. The company previously forecast organic revenue growth at the high end of 4% to 6% and constant currency earnings per share growth in the high single digits.
“Consumers are likely to remain mindful of their budgets and make choices in their purchases,” Pepsi executives said in prepared remarks.
Pepsi predicts a weaker first half of the year as product recalls hit its Quaker Oats business in North America and international conflicts hurt sales in some regions. Executives expect international organic revenue growth to outpace North America for the full year.
