{"id":84,"date":"2024-07-20T16:59:01","date_gmt":"2024-07-20T08:59:01","guid":{"rendered":"https:\/\/economicnews.info\/?p=84"},"modified":"2025-05-19T17:03:27","modified_gmt":"2025-05-19T09:03:27","slug":"pepsicos-q2-report-north-american-volume-declines-prompt-cautious-outlook","status":"publish","type":"post","link":"https:\/\/economicnews.info\/index.php\/2024\/07\/20\/pepsicos-q2-report-north-american-volume-declines-prompt-cautious-outlook\/","title":{"rendered":"PepsiCo’s Q2 Report: North American Volume Declines Prompt Cautious Outlook"},"content":{"rendered":"\n

On Thursday, July 11th<\/em>, PepsiCo Inc.<\/strong> (PEP<\/strong>) released its second-quarter earnings report for the period ending June 15th, presenting a mixed financial picture<\/em> influenced significantly by trends in its key markets.<\/p>\n\n\n\n

The beverage and snack giant reported revenue increased by nearly 1%<\/em> year-over-year to $22.5 billion<\/strong>. This figure, while showing modest growth primarily driven by the company’s PepsiCo International<\/strong> operations, slightly missed<\/em> the average analyst forecast of $22.57 billion compiled by LSEG. However, the company exceeded market expectations<\/em> on profitability, reporting net income of $3.08 billion<\/strong>, or $2.23 per share<\/strong>, up from $2.75 billion, or $1.99 per share, in the same period last year. Excluding certain items, adjusted earnings per share reached $2.28<\/strong>, beating the analyst consensus of $2.16.<\/p>\n\n\n\n

Despite the earnings beat, executives expressed a more conservative outlook<\/em> for the remainder of the fiscal year. They narrowed their projection for full-year organic revenue growth from the previous quarter’s forecast of “at least 4%” to now anticipating growth of “around 4%”. CEO Ramon Laguarta<\/strong> stated during a call with analysts, “When we predicted at least 4%, we thought we could probably aim for around 5%. But now we feel the growth rate is around 4%. This change is mainly related to US consumers<\/strong>.”<\/p>\n\n\n\n

This shift in guidance reflects noticeable weakness in the North American market. Executives highlighted that consumers have become more value-conscious<\/em> following several years of price increases. Shoppers are reportedly cutting back on purchases of higher-priced snacks like chips or switching to more affordable private-label alternatives. This change in purchasing behavior is now being observed across various income levels<\/em>, a shift from previous quarters where it was more concentrated among lower-income consumers.<\/p>\n\n\n\n

The impact of this demand softening was evident in volume figures for PepsiCo’s largest North American divisions. Frito-Lay North America<\/strong> saw its volume decline by 4%<\/strong> year-over-year, while PepsiCo Beverages North America<\/strong> experienced a 3%<\/strong> volume drop. The Quaker Foods<\/strong> unit in North America faced a sharper 17%<\/strong> volume decrease this quarter, a decline attributed to the lingering effects and related matters stemming from the Salmonella contamination recall incidents<\/strong> in December and January. Company executives anticipate volume in the Quaker Foods division will show improvement in the second half of the year as the impact of the recall subsides.<\/p>\n\n\n\n

Following the release of the mixed results \u2013 a profit beat overshadowed by a revenue miss and cautious revenue guidance \u2013 PepsiCo’s stock initially slipped more than 1%<\/em> in early trading on Thursday. However, the share price gradually recovered throughout the day<\/em>, managing to close with a modest gain<\/em> of 0.22%<\/strong>, suggesting that the strong profitability and reaffirmed core earnings guidance helped reassure investors despite the top-line and volume challenges in North America. The stock’s trading range over the past year highlights its volatility, with a 52-week high of $192.38<\/strong> and a 52-week low of $155.83<\/strong>. The last closing price was $166.38<\/strong>.<\/p>\n\n\n\n

Overall, the Q2 report indicates that while PepsiCo’s international business remains a source of solid growth and the company effectively manages profitability, navigating shifting consumer spending habits and volume declines in its crucial North American market presents a key challenge for the remainder of the fiscal year.<\/p>\n\n\n\n

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On Thursday, July 11th, PepsiCo Inc. (PEP) released its second-quarter earnings report for the period ending June 15th, presenting a mixed financial picture influenced significantly by trends in its key markets. The beverage and snack giant reported revenue increased by nearly 1% year-over-year to $22.5 billion. This figure, while showing modest growth primarily driven by […]<\/p>\n","protected":false},"author":3,"featured_media":86,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-84","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international-finance","category-market-performance"],"_links":{"self":[{"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/posts\/84","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/comments?post=84"}],"version-history":[{"count":1,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/posts\/84\/revisions"}],"predecessor-version":[{"id":87,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/posts\/84\/revisions\/87"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/media\/86"}],"wp:attachment":[{"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/media?parent=84"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/categories?post=84"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/economicnews.info\/index.php\/wp-json\/wp\/v2\/tags?post=84"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}