PepsiCo (PEP) Q2 2024 Earnings

Pepsi bottles with new and old logos are seen at a supermarket in Las Vegas, United States, on November 17, 2023.

Jakub Porzycki | Nurphoto | Getty Images

PepsiCo reported Mixed quarterly results were reported on Thursday, amid declining demand for beverages and snacks in North America.

The company also narrowed its full-year revenue outlook. Pepsi now expects organic revenue growth of about 4%, a more cautious outlook than its previous forecast of at least 4%. The company reiterated its forecast for core earnings growth in constant currencies of at least 8%.

The company's shares fell more than 2% in pre-market trading.

Here's what PepsiCo reported for the quarter ended June 15, compared with what Wall Street expected, based on a survey of analysts by LSEG:

  • Earnings per share: $2.28 adjusted vs. $2.16 expected
  • Revenue: $22.5 billion vs. $22.57 billion expected

Pepsi reported second-quarter net income of $3.08 billion, or $2.23 per share, up from $2.75 billion, or $1.99 per share, a year earlier.

Excluding items, the company posted earnings of $2.28 per share.

Net sales rose nearly 1% to $22.5 billion. The company's organic sales, which exclude acquisitions, divestitures and currency changes, rose 1.9% for the quarter, fueled by Pepsi's international business.

But the company struggled in its home market, where it faced recalls and declining demand for its products.

Leadership said in prepared remarks that consumers have become more value-conscious. After several years of price increases, shoppers are pushing back by buying fewer bags of chips or switching to cheaper private label options. Pepsi executives have previously said that low-income consumers are struggling the most.

Frito-Lay North America's volume fell 4%, while Pepsi's North American beverage unit saw a 3% volume decline. The metric strips out price and currency changes to reflect demand.

Pepsi's North American beverage volume has improved sequentially, executives say, suggesting the brand's efforts to lure back customers are paying off. The company is focusing on higher-margin packaging and products, as well as in-store promotions for its biggest brands, to attract thrifty shoppers, especially Frito-Lay brands including Cheetos and Doritos.

Quaker Foods North America saw its volume decline 17% in the quarter as the division continues to deal with the impact of recalls for potential salmonella contamination issued in December and January. Pepsi expects the segment's volume to improve in the second half of the year.

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