PepsiCo.Reporting double-digit revenue growth in Pakistan, China and other countries
PepsiCo. reported better-than-expected revenue in the first quarter due to strong international demand for its snacks and beverages.
New York-based The Purchase Company said its sales for the January-April period rose 2% to $18.3 billion. That was higher than Wall Street’s $18 billion estimate, according to analysts surveyed by FactSet.
Pepsi reaffirmed its 2024 financial guidance, which includes 4% organic revenue growth. The company said it expects a return to more normal growth this year after years of inflation-driven price increases.
This may have disappointed investors who have grown accustomed to PepsiCo’s strong growth. For example, last year’s organic revenue increased by 9.5%. PepsiCo stock fell more than 2.5% in Tuesday morning trading.
In North America, Frito-Lay sales increased 2% and Pepsi beverage sales increased 1%. Sales were hurt by a recall of Quaker Oats cereal, bars and snacks earlier in the quarter due to possible salmonella contamination. Quaker Foods’ sales fell 24% during the quarter.
However, the company’s sales rose 11% in Asia Pacific and 10% in Europe.
PepsiCo. Chairman and CEO Ramon Laguarta said the company is optimistic that consumer demand in the U.S. and elsewhere will continue to grow this year.
“Globally, we think consumers are very resilient,” Laguarta said on a conference call with investors. “That is basically supported by two facts: that unemployment rates are very low or very low globally, and that wages are growing at a good pace in most of the countries we participate in. Thing.”
According to Laguarta, sales in Europe were driven by demand in Eastern Europe. In Western Europe, consumers are less exposed to PepsiCo. Snacks and drinks will be on grocery store shelves throughout the quarter. Carrefour, one of Europe’s largest supermarket chains, announced in January that it would withdraw from PepsiCo. Unacceptable price increases have resulted in products being removed from stores in France, Belgium, Spain and Italy. The two companies resolved the price dispute and Carrefour began restocking PepsiCo. This is a product released in early April.
The company said Mexico, Brazil, Egypt, Pakistan, China and Australia also recorded double-digit organic revenue growth.
But Laguarta added a caveat. Consumer spending in China remains cautious, he and PepsiCo said. also pays close attention to low-income Americans who are purchasing fewer snacks or switching to store brands in the face of rising prices.
“Low-income consumers in the U.S. are reaching their limits,” he says. “This is the consumer we are emphasizing in our commercial programs, and we are learning how best to keep that consumer in our category.”
PepsiCo. has been heavily focused on raising prices over the past two years to counter soaring raw material costs. The fourth quarter of 2023 was the company’s eighth consecutive quarter of double-digit price growth.
Growth slowed in the first quarter. PepsiCo. Globally, net prices rose 5% during the quarter, but sales volumes fell 2%, the company said. PepsiCo. says some of its volume decline is strategic. The company has been shrinking package sizes to meet consumer demand for convenience and portion control.
PepsiCo. The company announced first-quarter net income of $2 billion, an increase of 5.6%. Excluding special items, the company’s earnings were $1.61 per share. That beat Wall Street’s expectations of $1.52.
