PepsiCo surpasses Q1 revenue expectations despite moderate price increases | Lifestyle
PepsiCo Reports Strong Revenue Growth in First Quarter
PepsiCo Beats Revenue Expectations in First Quarter, Driven by International Demand
PepsiCo has reported better-than-expected revenue in the first quarter of the year, thanks to strong international demand for its snacks and beverages. The Purchase, New York-based company announced that revenue rose 2% to $18.3 billion for the January-April period, surpassing Wall Street’s forecast of $18 billion.
In North America, Frito-Lay saw a 2% increase in revenue, while Pepsi beverage sales were up by 1%. However, sales were impacted by a recall of Quaker Oats cereal, bars, and snacks due to potential contamination with salmonella, leading to a 24% drop in Quaker Foods sales during the quarter.
Despite challenges in North America, PepsiCo experienced significant sales growth in Asia Pacific and Europe, with 11% and 10% increases respectively. In Europe, the company faced a setback when Carrefour, a major supermarket chain, temporarily pulled PepsiCo products from shelves in several countries due to price disputes. The issue was resolved, and Carrefour began restocking PepsiCo products in early April.
PepsiCo has been implementing price increases to offset rising ingredient costs, with the fourth quarter of 2023 marking the eighth consecutive quarter of double-digit percentage price hikes. However, the company saw a moderation in price increases in the first quarter, with net pricing up 5% globally while volumes fell by 2%. PepsiCo attributed some of the volume decline to strategic decisions, such as reducing package sizes to meet consumer preferences for convenience and portion control.
In terms of earnings, PepsiCo reported a 5.6% increase in net earnings to $2 billion in the first quarter, with adjusted earnings per share of $1.61, surpassing Wall Street’s forecast of $1.52. Despite the positive results, PepsiCo shares remained flat in premarket trading on Tuesday.
Overall, PepsiCo’s strong performance in the first quarter reflects its ability to navigate challenges and capitalize on international growth opportunities in the snacks and beverages market.
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