PepsiCo cuts earnings forecast as North American turnaround takes longer than expected — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- PepsiCo topped Q3 expectations with adjusted EPS of $2.34 and revenue of $25.27 billion, but cut its full-year core EPS growth guidance to 2.5%-3.5%, down from the prior low end of a 5%-7% range.
- PepsiCo's North American beverage volume shrank 2% and food volume was flat, with CEO Ramon Laguarta calling the domestic business a "meaningful opportunity for improvement."
- PepsiCo's international markets were the bright spot, posting volume growth in all but one unit and accounting for 41% of net revenue year-to-date, though its EMEA convenient foods division saw a 1% volume decline.
- CFO Steve Schmitt said the North American turnaround is moving more slowly than expected, with the fix centered on innovation, advertising, and marketing.
- PepsiCo's carbonated soft drink portfolio lagged the overall category, including rival Coca-Cola, even as organic volume improved in functional hydration and zero-sugar drinks.
- PepsiCo is planning cost reductions targeting redundancies and discretionary spending to free up investment in innovation and marketing, per Laguarta's prepared remarks.
- Shares of PepsiCo fell less than 1% in premarket trading despite the headline earnings beat, while Q3 net income attributable to the company reached $3.05 billion ($2.23 per share).
Why it matters: PepsiCo's Q3 beat masked a deeper problem — the North American turnaround is moving slower than expected, forcing a full-year EPS guidance cut from a 5-7% range to 2.5-3.5%. With 41% of revenue now coming from faster-growing international markets, investors are watching whether Laguarta's innovation-and-marketing push can reignite domestic snack and soda sales before further downgrades.
Ask SkimNews
