PepsiCo profit misses estimates as North America weighs on quarter
PepsiCo beat revenue expectations but fell short on adjusted earnings as softer U.S. snack and beverage demand offset overseas strength.
By Hana Yoshida · Markets Reporter
2 min read
PepsiCo reported quarterly adjusted earnings that came in just below analysts’ forecasts, as slower demand in North America weighed on the snack and beverage maker. CNBC reported that the company’s sales still topped expectations, helped by stronger demand outside the United States.
The results showed a split in PepsiCo’s business: international markets supported revenue growth, while U.S. consumers pulled back as inflation pressured household budgets. PepsiCo also kept its full-year outlook unchanged, according to CNBC.
For the second quarter, PepsiCo earned an adjusted $2.20 per share, CNBC reported. Analysts surveyed by LSEG had expected $2.21 per share.
Revenue reached $24.18 billion, above the $23.95 billion expected by analysts in the LSEG survey, according to CNBC. Net sales rose 6.4% from the year-earlier period.
Organic revenue, which strips out acquisitions, divestitures and currency effects, increased 2.4% in the quarter, CNBC reported. That measure is closely watched because it shows growth from the company’s existing operations.
North America slows the quarter
CNBC reported that weakness in PepsiCo’s North American food and beverage divisions offset stronger overseas performance. The company sells drinks under the Pepsi brand and owns snack businesses including major packaged-food operations.
CEO Ramon Laguarta said in prepared remarks posted on PepsiCo’s website that U.S. food and beverage category performance weakened during the quarter as consumers faced tighter budgets from higher inflation pressures, according to CNBC.
The company’s results point to continued pressure on packaged-food and beverage companies in the U.S., where shoppers have been more cautious about discretionary spending and grocery bills. CNBC attributed PepsiCo’s mixed quarter to that North American softness and better international demand.
Profit rises from a year earlier
PepsiCo reported net income attributable to the company of $2.98 billion, or $2.18 per share, CNBC said. That compared with $1.26 billion, or 92 cents per share, in the same quarter a year earlier.
Excluding restructuring and impairment charges and other items, PepsiCo posted adjusted earnings of $2.20 per share, according to CNBC. That figure was the one compared with LSEG’s analyst estimate.
The company’s revenue beat suggests PepsiCo still found growth in parts of its global business despite the drag from North America. CNBC reported that strong international demand for snacks and drinks helped lift sales above analyst expectations.
PepsiCo reiterated its full-year forecast, CNBC reported. The company did not change that outlook despite the earnings miss and softer performance in its U.S. categories.
This story draws on original reporting from CNBC.