PepsiCo beats first quarter profit and revenue estimates

PepsiCo reported quarterly results that beat analyst projections of Wall Street. The company reported adjusted earnings per share of $1.61, above the $1.55 expected. Total revenue reached US$19.44 billion, against an estimate of US$18.94 billion.

Net sales grew 8.5% year-on-year. Organic revenue, which excludes effects from acquisitions, divestments and foreign exchange, increased 2.6%. Net income attributable to shareholders reached US$2.33 billion, or US$1.70 per share, compared to US$1.83 billion, or US$1.33 per share, in the same period of the previous year.

Results exceed market projections

The numbers were better than the consensus compiled by LSEG. Adjusted earnings per share were US$0.06 above forecast. Revenue exceeded expectations by around US$550 million.

The company’s shares rose slightly in trading before the market opened at Nova York. Investidores closely followed the performance of the food segment at América of Norte, which had been facing pressure for more than two years.

The beverage business in the same region showed a 2.5% drop in volume. Já food division, which includes Frito-Lay and Quaker Oats, recorded the first volume increase in more than two years.

Price cuts recover demand for snacks

PepsiCo reduced prices for brands such as Lay’s, Doritos, Tostitos and Cheetos by up to 15% from February. The measure sought to win back consumers affected by previous adjustments during the period of high inflation.

The food segment in América of Norte showed volume growth of 2%. Esse indicator excludes price and exchange rate variations and better reflects real customer demand.

• Lay’s, Doritos, Tostitos and Cheetos had a price reduction of up to 15%
• Food volume at América of Norte grew 2% in the quarter
• Beverage division in the region recorded a 2.5% drop in volume
• Acquisition of Poppi and distribution of Alani Nu helped with sales

The company also cited contributions from recent acquisitions, such as Poppi, and the new distribution of the energy drink Alani Nu. The sale of Rockstar also impacted the numbers.

Investments in innovation and brand reformulation

PepsiCo plans to revamp the Gatorade brand. The changes include greater emphasis on hydration benefits, launching a lower-sugar version and phasing out artificial colors.

The company has invested in products aligned with consumer trends, such as options with more protein and fiber. Recent Exemplos involve lines such as Pepsi Prebiotic, Starbucks Coffee & Protein, Doritos Protein and SunChips Fiber.

Executives highlighted efforts to adapt the portfolio to changes in consumer behavior. The focus remains on offering affordable value without compromising product quality.

Annual outlook maintained despite uncertainties

PepsiCo reiterated full-year projections. Organic revenue is expected to grow between 2% and 4%. Earnings per share in constant currency should increase between 4% and 6%.

The company recognized that the macroeconomic environment has become more volatile and uncertain. Fatores how geopolitical conflicts in Oriente Médio contribute to this perception.

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Commodity hedging programs should provide some protection against changes in input costs in the short term. The company continues to monitor the global scenario closely.

CEO Ramon Laguarta participates in an interview on CNBC at 10:15 am ET to comment on the results. The broadcast takes place live on CNBC+ or on the CNBC platform Pro.

Details by segment and future strategies

Net sales growth was driven by a combination of factors. Além price cuts on snacks, the company cited expansion in specific categories and adjustments to the product mix.

The food division at América of Norte returned to recording positive numbers after a period of decline. Consumer reaction to lower prices appeared in the first quarter.

In the beverage segment, demand showed greater sensitivity to readjustments. Marcas as well as Starry and Poppi are part of this area, which remains under evaluation.

PepsiCo maintains investments in marketing and product development. The objective is to balance volume and profitability in mature markets such as Estados Unidos.

External factors and risk management

The company operates in the context of a global economy with greater unpredictability. Conflitos and Oriente Médio are cited as an element that increases volatility.

Even so, the annual forecast was not changed. The board assesses that internal initiatives, such as cost hedging and portfolio innovation, help mitigate risks.

Analysts monitor volume performance as a key indicator of demand recovery. The initial results after the price cuts are seen as a positive sign.

The company remains committed to operational efficiency and capital allocation. Detalhes Additional information on strategy should come at the investor conference.

PepsiCo operates in more than 200 countries and offers a broad portfolio of beverages and foods. In the quarter, the focus on accessibility had a direct impact on one of the most important markets.