On October 21, 2022, a truck with a Pepsi-Cola logo on a semitrailer was seen on Interstate 95 in Maryland, USA.
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Pepsi It lowered its full-year organic revenue forecast on Tuesday after sales fell short of expectations for the second straight quarter.
Chief Executive Ramon Laguarta said in a statement that the Quaker Foods North America recall, weak U.S. demand and business disruptions in some international markets affected the company’s results in the quarter.
Currently, PepsiCo expects organic revenue to grow in the low single digits in 2024, down from its previous forecast of 4% growth. The company reiterated its forecast for core constant currency earnings per share to grow by at least 8%.
The company’s shares fell 1% in premarket trading.
The company’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted $2.31, $2.29 expected
- Revenue: $23.32 billion, $23.76 billion expected
PepsiCo reported third-quarter net income attributable to the company of $2.93 billion, or $2.13 per share, down from $3.09 billion, or $2.24 per share, in the same period last year.
Excluding items, the company earned $2.31 per share.
Net sales fell 0.6% to $23.32 billion. Organic revenue, which excludes acquisitions, divestitures and currency changes, grew 1.3% in the quarter.
Demand for PepsiCo snacks and beverages fell this season. The company reported a 2% sales decline in its food and beverage segment. Last quarter, executives said shoppers at all income levels were changing their behavior.
Quaker Foods North America saw the largest sales decline, down 13%. The company issued its first recall for potential salmonella contamination in December and later expanded the recall January. In June, PepsiCo officially closed a factory linked to the recall, although production had been halted.
Laguarta and PepsiCo Chief Financial Officer Jamie Caulfield said in prepared remarks that the consequences of the recall are now waning.
Frito-Lay North America reported a 1.5% sales decline. The company has been working to provide more value to consumers and increase in-store availability of its snacks, which include Cheetos, SunChips and Stacy’s pita chips. While the segment’s sales have grown sequentially, the broader category has slowed compared to historical performance.
“Salty snacks have underperformed so far this year after outperforming the packaged food category in previous years,” PepsiCo executives said in prepared remarks.
PepsiCo’s North American beverage business sales fell 3%. Brands such as Gatorade and PepsiCo saw revenue growth this quarter.
Food and beverage sales also shrank in markets across Latin America and Africa, the Middle East and South Asia.
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