PepsiCo Posts Weaker-Than-Expected Q3 Results, Cuts FY Sales Outlook Again
- PepsiCo reports a decline in third-quarter revenue and profit, citing the impact of inflation on consumer spending.
- The company reduced its full-year sales outlook for the second consecutive quarter, expecting only a low-single-digit sales increase, down from a previous estimate of 4% growth.
- Inflation continues to challenge budgets and spending patterns, according to PepsiCo leadership.
PepsiCo (PEP) posted weaker-than-expected third-quarter earnings, revealing that inflationary pressures have negatively impacted consumer spending. This has forced the beverage and snack giant to lower its full-year sales outlook once again.
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Third-Quarter Performance Below Expectations
For the third quarter, PepsiCo reported $23.32 billion in revenue, down slightly from the same period last year, and falling short of analysts’ expectations. The company also saw a drop in net income, reporting $2.93 billion, a decline compared to the previous year, and below the consensus estimates gathered by Visible Alpha.
Although sales improved slightly in North American beverages (0.2%) and in Europe (6.5%), other regions experienced a decline. Company leaders acknowledged the cumulative impact of inflation on consumer budgets and spending patterns, noting it as a major factor behind the weaker results.
Second Sales Outlook Cut for FY 2024
This marks the second consecutive quarter that PepsiCo has lowered its full-year organic sales outlook. The company now expects a low-single-digit increase in sales for the year, down from the previously estimated 4% growth. Earlier this year, the company had already scaled down its expectations from a minimum of 4% growth.
As a result of this financial update, PepsiCo’s shares — already down 1.6% year-to-date — dropped an additional 0.7% in pre-market trading.
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