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PepsiCo revised its full-year organic revenue outlook downward after experiencing weaker-than-expected sales for the second consecutive quarter. CEO Ramon Laguarta attributed the performance dip to Quaker Foods North America recalls, softening demand in the U.S., and disruptions in certain international markets.
The company now anticipates a low-single-digit increase in organic revenue for 2024, a decrease from its initial projection of 4% growth. However, Pepsi reaffirmed its forecast for a minimum 8% rise in core constant currency earnings per share.
In the third quarter, Pepsi recorded adjusted earnings per share of $2.31, surpassing analysts’ expectations by $0.02. Revenue came in at $23.32 billion, falling short of the anticipated $23.76 billion. Net sales decreased by 0.6% to $23.32 billion, while organic revenue rose by 1.3%.
Both Pepsi’s snacks and drinks experienced decreased demand this quarter, with volume declining by 2% for both divisions. Quaker Foods North America witnessed the most significant volume decrease at 13% due to a recall for potential salmonella contamination.
Frito-Lay North America reported a 1.5% volume decline, while Pepsi’s North American beverage business saw a 3% drop in volume. Latin America and Africa, Middle East, and South Asia markets also reported reduced volume in both food and beverage categories.
In an effort to address these challenges, Pepsi is focusing on offering more value to consumers, enhancing in-store availability, and seeking to improve category performance.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.