PepsiCo Earnings Beat Expectations, but North American Sales Slip
PepsiCo’s Q4 2024 earnings report delivered a mix of positive and challenging results. While the company exceeded earnings per share expectations, its North American sales faced notable declines. The beverage and snack giant reported an adjusted EPS of $1.96, slightly beating analysts’ expectations of $1.94. However, revenue came in at $27.78 billion, just shy of the anticipated $27.89 billion.
Despite strong global demand, PepsiCo struggled with falling North American sales for its Frito-Lay and beverage segments, which saw a 3% decline in volume. The company attributed this decline to shifting consumer preferences, particularly the rise in health-conscious eating habits. Additionally, the Quaker Foods division suffered setbacks from product recalls, further impacting overall performance.
PepsiCo’s financial performance in Q4 2024
PepsiCo’s Q4 2024 earnings reflected both resilience and market pressures. The company reported a net income of $1.52 billion, or $1.11 per share, compared to $1.3 billion, or 94 cents per share, in the same period the previous year. The slight revenue shortfall was primarily driven by weaker-than-expected North American sales, despite price hikes over the past year.
Key segment performance included:
Frito-Lay North America: Sales volume declined by 3%, signaling reduced consumer demand for salty snacks. However, revenue remained stable due to price increases.
PepsiCo Beverages North America: The beverage segment also experienced a 3% decline in volume, as consumers turned to healthier alternatives and weight-loss trends continued to influence consumption habits.
Quaker Foods North America: This segment saw one of the most significant setbacks, with product recalls negatively impacting sales and consumer trust.
International Performance: Unlike North America, global snack and beverage volumes increased by 1%, with notable growth in markets across Africa and Asia. PepsiCo’s international footprint helped offset domestic losses.
PepsiCo remains confident in its long-term strategy and has projected organic revenue growth in the range of 2% to 4% for 2025. To reassure investors, the company announced a 5% increase in its annualized dividend per share, starting in June 2025.
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