PepsiCo reported mixed quarterly results on February 4, 2025, as demand for its snacks and beverages declined in North America for the fifth consecutive quarter. The company’s shares fell over 2% in premarket trading following the announcement.
- PepsiCo reports mixed quarterly results.
- North American demand falls for fifth quarter.
- Earnings per share slightly exceed expectations.
- Net sales decrease by 0.2%.
- Frito-Lay volume declines due to budget concerns.
- 2025 projections include modest revenue growth.
PepsiCo’s fourth-quarter results highlighted a challenging environment for the company, particularly in North America. The company reported a net income of $1.52 billion, or $1.11 per share, which is an increase from $1.3 billion, or 94 cents per share, a year prior. Adjusted earnings per share stood at $1.96, slightly above the $1.94 expected by analysts. However, net sales dropped by 0.2% to $27.78 billion, missing the anticipated $27.89 billion.
Key statistics from the report include:
- Organic revenue growth of 2.1% in the fourth quarter.
- A 3% decline in quarterly volume for North American beverages.
- A 3% drop in volume for Frito-Lay North America.
The decline in demand is attributed to changing consumer behavior, as shoppers are becoming more cautious with their spending due to rising food prices and interest rates. The company’s beverage unit saw a decline, though Gatorade gained market share, and Mountain Dew Baja Blast exceeded $1 billion in annual sales. Additionally, Quaker Foods North America experienced a 6% volume drop, impacted by a recall from December 2023.
Looking ahead, PepsiCo projects low-single digit growth in organic revenue and mid-single digit growth in core constant currency earnings per share for 2025. CEO Ramon Laguarta emphasized the need to improve performance in North America while continuing to expand internationally.
In summary, PepsiCo’s mixed quarterly results reflect ongoing challenges in the North American market, despite some successes in specific product lines. The company aims to navigate these challenges while focusing on growth opportunities in the coming years.
