CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

PepsiCo loses 3% after mixed results and outlook 📊

18:46 9 February 2024

PepsiCo's (PEP.US) net profit exceeded estimates, but for the first time in nearly four years, quarterly revenues fell by 0.5%, potentially giving sellers reasons to reconsider business prospects in a lower inflation expectation environment that limits price-driven margin improvements. This revenue decline is attributed to high credit costs and reduced savings impacting consumers during the holiday quarter, with disappointing overall demand in North America.

Key Financial Metrics:

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app
  • Revenue: $27.85 billion vs. expected $28.4 billion
  • Adjusted Earnings Per Share (EPS): $1.78 vs. expected $1.72
  • Net Profit: $1.3 billion vs. $518 million in Q4 2022

Key insights from the report

According to PepsiCo, U.S. consumers unexpectedly changed their habits from eating and drinking at home (lower Pepsi sales) to buying more snacks and Gatorade drinks. The company remains optimistic about the overall state of consumers, citing low unemployment and hopes that interest rates will fall by summer and wages will grow faster than inflation. According to the company, f/x volatility also negatively affected revenues in Q4 2023.

  • Organic revenues of Pepsi grew by 4.5% in the quarter, driven by higher prices
  • Further price increases seem unfeasible as they have negatively affected product demand; Pepsi’s sales volume fell in Q4
  • Consumer preference for smaller packaging due to convenience and cost impacted sales
  • Sales volumes fell by 2% for Frito-Lay North America (Cheetos, Doritos) and 6% for Pepsi; Quaker Foods saw an 8% decline, attributed to discontinuing granola bars and cereal

Forecasts

In 2024, Pepsi anticipates that organic revenues will grow by at least 4%, and earnings per share will increase by at least 8%. Previously, Pepsi estimated organic revenue growth between 4% to 6%; however, the earnings forecast remains unchanged. The company now expects a weaker first half of the year due to product withdrawals from the North American Quaker Oats sector. The management expects that global organic revenue growth will exceed growth in North America in 2024.

Source: xStation 5

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back
Xtb logo

Join over 935 000 investors from around the world