PepsiCo reported mixed fourth-quarter results on Tuesday, exceeding earnings expectations but facing continued declines in demand for its snacks and beverages in North America.
This marks the fifth straight quarter of weakened sales in the company’s home market.
Following the announcement, PepsiCo shares dropped more than 2% in premarket trading.
Quarterly Performance vs. Expectations
According to a survey of analysts by LSEG, PepsiCo’s results compared to Wall Street estimates were:
-Earnings per share (EPS): $1.96 adjusted vs. $1.94 expected
-Revenue: $27.78 billion vs. $27.89 billion expected
-PepsiCo’s net income for the quarter rose to $1.52 billion, or $1.11 per share, up from $1.3 billion, or 94 cents per share, in the same period last year. Excluding restructuring and impairment charges, the company reported an adjusted EPS of $1.96.
Net sales saw a slight decline, reaching $27.78 billion, while organic revenue—adjusted for acquisitions, divestitures, and foreign exchange—grew by 2.1%.
Declining Demand in North America
While PepsiCo’s global volume saw a modest 1% increase for both snacks and beverages, North American demand continued to weaken. U.S. consumers have been more cautious in their spending, snacking less and making fewer purchases at convenience stores.
Frito-Lay North America: Volume fell 3% as grocery shoppers pulled back due to prolonged high food prices and interest rates.
PepsiCo Beverages North America: Volume declined 3%, though the division saw some success with Gatorade gaining market share and Mountain Dew Baja Blast surpassing $1 billion in annual sales.
Quaker Foods North America: Volume dropped 6%, still feeling the effects of a December recall. The company expects performance to recover in 2025 as it moves past the recall’s impact.
“In 2024, the salty and savory snack categories underperformed broader packaged foods after several years of outperformance,” CEO Ramon Laguarta and CFO Jamie Caulfield noted in a prepared statement.
Outlook for 2025
Looking ahead, PepsiCo expects a low-single-digit increase in organic revenue and a mid-single-digit rise in core constant currency EPS for 2025.
“We will continue to expand our international business while implementing measures to improve performance in North America,” Laguarta stated.
Despite the challenges in its core U.S. market, PepsiCo remains focused on strengthening global growth and addressing shifting consumer preferences.
