PepsiCo Overcomes Lagging US Sales in Strong Q2
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PepsiCo reported better-than-expected earnings and revenue in the second quarter despite sluggish North American sales.
Sales of Frito-Lay and other snacks fell 1% in North America during the April-June period, PepsiCo said July 17, while beverage sales slid 2% in the region.
Years of double-digit price increases from PepsiCo and changing consumer preferences has weakened demand for the company’s drinks and snacks, PepsiCo said in February. It said July 17 that it’s trying to combat perceptions that its products are too expensive by expanding distribution of value brands like Chester’s and Santitas.
Sales rose in some other regions, including Latin America and Asia. PepsiCo said low- or no-sugar versions of its trademark Pepsi saw strong sales globally.
$PEP In Q2, our business effectively navigated through a challenging environment—staying in sync with consumers along the way. Explore our full earnings — PepsiCo (@PepsiCo)
Revenue rose less than 1% to $22.7 billion in the April-June period. That was higher than the $22.3 billion Wall Street forecast, according to analysts polled by FactSet.
PepsiCo ranks No. 2 on the Transport Topics Top 100 list of the largest private carriersÌýin North America. PepsiCo Foods North America ranks No. 4 on theÌýtop food service carriers list, and PepsiCo Beverages North America ranks No. 1 on theÌýtop beverage carriers list.
PepsiCo’s net income fell 59% to $1.3 billion. Adjusted for one-time items, including impairment charges related to its Rockstar and Be & Cheery brands, PepsiCo earned $2.12 per share. That was also higher than the $2.03 analysts had forecast.
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PepsiCo shares rose less than 2% in premarket trading July 17.
PepsiCo lowered its full-year earnings expectations in April, citing increased costs from tariffs and a pullback in consumer spending. The company reaffirmed that guidance July 17.
Its tariff costs have risen since then. In June, the Trump administration hiked the tariff on imported aluminum from 25% to 50%.
