PepsiCo Lowers Profit Forecast Amid Trade Uncertainty

Revised Profit Forecast and Key Financial Metrics

PepsiCo has revised its annual core earnings per share (EPS) projection, now expecting flat growth compared to the prior forecast of a mid-single-digit increase. This adjustment follows mixed quarterly results, where the company reported organic revenue growth of 1.2% for the quarter but faced a 3% decline in worldwide volumes for its convenient foods unit and flat results in its beverage segment.

The company posted a net income of $1.83 billion, equating to $1.33 per share, compared to $2.04 billion or $1.48 per share a year earlier. Excluding one-time items, adjusted EPS stood at $1.48, slightly missing analyst expectations of $1.50. Net sales reached $17.92 billion, a 1.8% decline year-over-year, though in line with forecasts. These results underscore the mixed financial performance driving the revised annual outlook.

Factors Driving the Forecast Cut

PepsiCo attributed the downward revision to mounting global trade uncertainties, particularly tariff-related disruptions that are increasing supply chain costs. CEO Ramon Laguarta highlighted the volatile macroeconomic environment as a significant headwind, noting that global trade tensions have created challenges across the company’s operations.

In addition to external pressures, subdued consumer spending has hampered performance, especially in North America. The region saw a 1% volume decline in the food business and a 3% drop in beverage volumes. These challenges are compounded by inflationary pressures, which have restrained consumer demand and further stressed PepsiCo’s profitability. To address these issues, the company is reportedly implementing measures to stabilize its North American performance while navigating the broader economic volatility.