PepsiCo reported mixed quarterly results Thursday, hurt by declining demand in North America for its drinks and snacks.
The company also narrowed its revenue outlook for the full year. Pepsi now expects organic revenue growth of approximately 4%, a more cautious outlook than its previous forecast of at least 4%. The company reiterated its guidance for core constant currency earnings growth of at least 8%.
Shares of the company fell more than 1% in premarket trading.
Here’s what PepsiCo reported for the quarter ending June 15 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $2.28 adjusted vs. $2.16 expected
- Revenue: $22.5 billion vs. $22.57 billion expected
Pepsi posted second-quarter net income attributable to the company of $3.08 billion, or $2.23 per share, up from $2.75 billion, or $1.99 per share, a year earlier.
Excluding items, the company earned $2.28 per share.
Net sales rose nearly 1% to $22.5 billion. The company’s organic revenue, which excludes acquisitions, divestitures and currency changes, increased 1.9% for the quarter, fueled by Pepsi’s international business.
But the company struggled in its home market, hurt by product recalls and shrinking demand for its products. After several years of price increases, consumers are pushing back by buying fewer bags of chips or switching to cheaper private-label options. Last quarter, executives said that low-income shoppers, in particular, have been struggling the most.
Frito-Lay North America’s volume declined 4%, while Pepsi’s North American beverage unit saw volume shrink 3%. The metric strips out pricing and currency changes to reflect demand.
Quaker Foods North America saw its volume fall 17% in the quarter as the division continues to deal with fallout related to recalls for potential salmonella contamination issued in December and January.
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