PepsiCo expects lower sales growth despite profit forecast

10/9/2024, 3:03 PM

Despite the anticipated slowdown in sales growth, PepsiCo remains committed to solid profit increases.

Eulerpool News Oct 9, 2024, 3:03 PM

The US food conglomerate PepsiCo expects slower revenue growth for the current fiscal year due to product recalls and geopolitical tensions. According to a statement from Purchase (New York), revenue, excluding currency effects and the purchase and sale of business units, will grow by only a low single-digit percentage. This contrasts with the four percent originally targeted by CEO Ramon Laguarta.

Despite the modest revenue growth, Laguarta maintains his profit forecast. The earnings per share, adjusted for special items, are expected to rise by at least eight percent, excluding currency effects. Including currency effects, PepsiCo expects an increase in earnings per share of at least seven percent to $8.15.

In the third quarter, PepsiCo achieved sales of 23.3 billion USD (21.2 billion EUR), which represents a decrease of 0.6 percent compared to the same period last year. However, the organic revenue increased by 1.3 percent. The total profit fell by five percent to 2.9 billion USD, due to product recalls by the US division Quaker Foods and a decline in the snack division Frito-Lay. On the other hand, the business in Europe performed better, partially alleviating the overall segment.

Despite the positive earnings forecast, PepsiCo shares had to record a decline of just over one percent in pre-market US trading. On the NASDAQ, the stock temporarily closed at 169.23 US dollars, corresponding to a price gain of 1.21 percent.

The current situation shows that PepsiCo, despite challenges in the business segment and external influences, continues to aim for solid profitability. Focusing on the European market and adjusting business strategies could be crucial in mitigating the impacts of recalls and geopolitical tensions.

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