PepsiCo beat Wall Street expectations for first-quarter revenue as demand held steady for the soda and snacks giant's Tropicana juices and Cheetos in its international markets.
Consumers have remained resilient and shelled out money for PepsiCo's Lays chips and 7UP products across the company's international markets, helping offset a slowdown witnessed in its major market United States.
Several rounds of price hikes in the US have led consumers in the region to push back on the company's sodas and juices as sticky inflation makes customers cautious with their spending.
The company's international business accounted for about 40% of its total fiscal 2023 revenue.
PepsiCo's average prices jumped 5% for the quarter ended 23 March, while organic volume slipped 2%. That compared with an average price increase of 9% in the fourth quarter of 2023.
Quarterly Highlights
Sales at the company's North America beverage unit, PepsiCo's largest business, rose 1% in the first quarter, while organic volumes fell 5%.
The company's net revenue rose to $18.25 billion (€17.1 billion) in the quarter, from $17.85 billion (€16.8 billion) a year earlier, while analysts had estimated $18.07 billion (€16.9 billion), according to LSEG data.
PepsiCo maintained its annual organic sales and core profit forecasts.
On an adjusted basis, the company earned $1.61 per share. Analysts had expected a profit of $1.52 per share.
Chairperson and chief executive Ramon Laguarta stated, “During the first quarter, our businesses remained agile and performed well, with a strong performance from our International business.
“We delivered a sequential improvement in our volume trends, and year-over-year growth in our net revenue, operating profit margin and EPS – despite the impact of certain product recalls at Quaker Foods North America and a difficult net revenue growth comparison from the prior year.”
News by Reuters, additional reporting by ESM.
