(AP Photo/Stew Milne, File) FILE – Gatorade bottles are shown on the sideline before an NFL preseason game between the Jacksonville Jaguars vs. Atlanta Falcons in Atlanta, August 23, 2024. (AP Photo/Stew Milne, File)
PepsiCo has lowered its organic revenue projection for the year as U.S. consumers continue to reduce their purchases of its snacks and beverages.
The company in Purchase, New York said that it now expects organic revenue, which is adjusted for currency exchanges, product acquisitions, and divestments, to grow in the low single digits for the year. It had anticipated an increase of 4%.
PepsiCo’s North American performance was “subdued”, hurt by a large recall of Quaker Oats cereals and granola bars, as well as a weak demand for Frito-Lay drinks and snacks. Frito-Lay North America sales volumes dropped 1.5% while North American beverage volume fell 3%.
After years of price increases, consumers began to protest this summer. PepsiCo promised to lower the prices of some products such as tortilla chips and potato chips. Frito-Lay’s prices increased by only 0.5% during the third quarter.
PepsiCo has raised prices globally by 3%. In every market but Europe, sales volumes were down.
The third quarter revenue was $23.3 billion. Wall Street expected revenue of $23.8 Billion, according to FactSet’s analysts. PepsiCo has seen its quarterly revenue growth slow down in recent quarters. It had been growing by double digits for many years.
Net income dropped 5%, to $2.9 billion or $2.13 a share. PepsiCo’s adjusted earnings per share were $2.31, higher than the analysts’ expectations of $2.29.
PepsiCo’s shares fell 1% during premarket trading.