A truck with Pepsi logo on a semitrailer is seen at Interstate 95 highway in Maryland, United States, on October 21, 2022.
Beata Zawrzel | Nurphoto | Getty Images
PepsiCo on Tuesday lowered its full-year outlook for organic revenue after its second straight quarter of weaker-than-expected sales.
The repercussions of the Quaker Foods North America recalls, weakening demand in the U.S. and business disruptions in some international markets weighed on the company’s performance this quarter, CEO Ramon Laguarta said in a statement.
For 2024, Pepsi now expects a low-single-digit increase in organic revenue, down from its prior outlook of 4% growth. The company reiterated its forecast for an increase of at least 8% for its core constant currency earnings per share.
Shares of the company fell 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $2.31 adjusted vs. $2.29 expected
- Revenue: $23.32 billion vs. $23.76 billion expected
Pepsi 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, a year earlier.
Excluding items, the company earned $2.31 per share.
Net sales fell 0.6% to $23.32 billion. Organic revenue, which strips out acquisitions, divestitures and currency changes, rose 1.3% in the quarter.
Demand for Pepsi’s snacks and drinks fell this quarter. The company reported that volume for both its food and beverage divisions declined 2%. Last quarter, executives said that shoppers across all income levels are changing their behavior.
Quaker Foods North America reported the steepest drop-off in volume, with a 13% slide. The company issued its first recall for potential salmonella contamination in December, then widened it in January. In June, Pepsi officially closed a plant tied to the recalls, although production had already stopped.
