Naharnet Newsdesk
_by Naharnet Newsdesk 23 April 2024, 14:16_
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PepsiCo reported better-than-expected revenue in the first quarter
_PepsiCo_ reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.
Financial Results
The Purchase, New York-based company said revenue rose 2% to $18.3 billion for the January-April period. That was higher than the $18 billion Wall Street forecast, according to analysts polled by _FactSet_.
– Revenue increased by 2% to $18.3 billion
– Exceeded Wall Street's forecast of $18 billion
North America Revenue Performance
In _North America_ Frito-Lay revenue rose 2%, while Pepsi beverage sales were up 1%. Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars, and snacks because of potential contamination with _salmonella_.
– Quaker Foods sales dropped 24% during the quarter.
Sales Growth Analysis
The company saw 11% sales growth in _Asia Pacific_ and 10% sales growth in _Europe_.
Sales and Product issues in Europe
Sales in Europe grew despite fewer products on grocery shelves in some countries. _Carrefour_, one of Europe's largest supermarket chains, announced in January that it was pulling PepsiCo products from store shelves in France, Belgium, Spain and Italy due to unacceptable price increases. The two companies resolved their pricing dispute and Carrefour began restocking PepsiCo products in early April.
– Sales in Europe grew despite fewer products on grocery shelves
– Carrefour pulled PepsiCo products from store shelves due to price increases
– Restocking of PepsiCo products began in early April
PepsiCo Price Strategy
PepsiCo has leaned heavily into price increases over the past two years to combat higher ingredient costs. The fourth quarter of 2023 was the company's eighth straight quarter of _double-digit percentage_ price increases.
– The strategy involved:
– _Adapting to changing market conditions_
– _Maintaining profitability_
– _Staying competitive_
Changes in Pricing and Volumes
But those increases moderated in the first quarter. PepsiCo said _net pricing_ was up 5% globally during the quarter, while volumes fell 2%. PepsiCo has said some of that volume decline is *strategic*. The company has been shrinking package sizes to meet consumer demand for convenience and portion control.
– PepsiCo reported a 5% increase in net pricing globally
– PepsiCo experienced a 2% decline in volumes
Financial Performance Report
PepsiCo said its net earnings rose 5.6% to $2 billion in the first quarter. Excluding special items, the company earned $1.61 per share. That beat Wall Street's forecast of $1.52.
PepsiCo shares were flat in premarket trading Tuesday.
_"PepsiCo reported adjusted earnings of $1.40 per share on revenue of $15.71 billion."_
Key highlights:
– _Revenue increased by 5.3% year-over-year._
– _Net income rose to $2.34 billion._
Overall, PepsiCo's performance has been steady, leading to a flat opening in premarket trading.
