PepsiCo Shares Drop 4% as US Snack Sales Stall
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- PepsiCo warned of "rising inflationary pressures" for US consumers, citing elevated fuel costs as oil hit roughly $80 a barrel following the resumption of US-Iran hostilities
- PepsiCo's North American snacks unit posted flat sales volumes for Q2 (ended June 13), with price cuts driving a 2% drop in organic revenue — a stall after Super Bowl-driven gains earlier this year
- PepsiCo shares fell 4% in mid-morning trading, with CEO Ramon Laguarta telling analysts the near-term US outlook "all depends on the price of gas"
- PepsiCo's international divisions all delivered reported revenue growth of at least 10% in Q2, with Laguarta highlighting resilient performance in the Middle East, Vietnam, Thailand, China, and Europe despite the fuel-cost backdrop
- PepsiCo reported a 6.4% rise in total Q2 revenue to $24.2bn, beating Wall Street expectations, while net income climbed to nearly $3bn
- Walmart announced price "rollbacks" this week on PepsiCo products including 8oz bags of Lay's classic crisps and 24-packs of Pepsi, Diet Pepsi, and Diet Mountain Dew
- PepsiCo maintained its full-year guidance of 2–4% organic revenue growth and 4–6% EPS growth, saying productivity savings and tariff refund claims would offset "a good portion" of higher input costs
Why it matters: PepsiCo's second-half outlook now hinges on a variable — fuel prices — the company explicitly says it cannot control, and shares dropped 4% on the day. The $24.2bn revenue beat was carried entirely by international divisions posting at least 10% growth, while the US business, already pressured by GLP-1 adoption and processed-food pushback, stalled after initial Super Bowl price-cut traction. Walmart's simultaneous price rollbacks on PepsiCo products add another margin-compression layer for the domestic snack business.
