Purchase, New York – PepsiCo exceeded revenue expectations for the first quarter, driven by strong demand for its snacks and beverages overseas. The company reported a 2% increase in revenue, reaching $18.3 billion for the period from January to April. This result outperformed the $18 billion forecasted by Wall Street analysts.
The company reaffirmed its financial outlook for 2024, including a projected organic revenue growth of 4%. PepsiCo anticipates a return to more standard growth rates this year after experiencing several years of inflation-induced price hikes. This adjustment may have disappointed investors accustomed to stronger growth trends at the company.
In North America, Frito-Lay saw a 2% increase in revenue, while Pepsi beverage sales rose by 1%. Sales were impacted by a recall of Quaker Oats products early in the quarter due to potential salmonella contamination. Consequently, Quaker Foods sales plummeted by 24% during the same period.
On the bright side, PepsiCo experienced robust sales growth of 11% in Asia Pacific and 10% in Europe. PepsiCo Chairman and CEO, Ramon Laguarta, expressed optimism for continued consumer demand growth in the U.S. and other markets worldwide.
Despite the positive results, Laguarta highlighted some areas of concern. He mentioned that consumer spending in China remains cautious, and lower-income consumers in the U.S. are showing signs of tightening budgets. PepsiCo is closely monitoring these trends to adapt accordingly and maintain consumer engagement in their product categories.
PepsiCo demonstrated resilience in the face of global economic challenges by implementing strategic price increases over the past two years. Although volume declined by 2% in the first quarter, net pricing increased by 5% globally. The company attributed some of the volume decrease to strategic adjustments in package sizes to align with consumer preferences for convenience and portion control.
Net earnings for PepsiCo rose by 5.6% to $2 billion in the first quarter, with earnings per share of $1.61 excluding special items. This result surpassed the $1.52 per share forecasted by Wall Street analysts, showcasing the company’s strong performance in a competitive market.