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PepsiCo {{ m-tag option="price" ticker="PEP" currency="USD" }} reported mixed results for the second quarter of 2024, highlighting achievements and challenges. The company faces declining demand in North America and has adjusted its revenue outlook for the year.
Performance Overview
Earnings per share (EPS):
- Reported: $2.28
- Expected: $2.16
Revenue:
- Reported: $22.5 billion
- Expected: $22.57 billion
Net Income:
- Current year: $3.08 billion or $2.23 per share
- Previous year: $2.75 billion or $1.99 per share
Excluding items:
- EPS remained at $2.28
Net Sales:
- Increased by nearly 1%
Organic Revenue:
- Increased by 1.9%
- Driven by international markets
Challenges in North America
Despite global gains, PepsiCo struggled domestically. The company’s North American beverage unit saw volume shrink by 3%, while Frito-Lay North America experienced a 4% decline in volume. The consumer shift towards more value-conscious spending has reduced purchases of PepsiCo’s products and increased preference for cheaper, private-label options.
Strategic Adjustments
In response to these challenges, PepsiCo is focusing on higher-margin packaging, in-store promotions, and its flagship brands like Cheetos and Doritos. CEO Ramon Laguarta noted improvements in volume for North American drinks and highlighted a successful July 4th sales period.
Future Outlook
PepsiCo narrowed its revenue growth outlook to approximately 4% for the year, down from at least 4%. The company maintains its guidance for core constant currency earnings growth of at least 8%; therefore, PepsiCo anticipates a recovery in the latter half of the year.
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