PepsiCo Profits Rise Even As Sales Slip Over Price Hikes

PepsiCo saw a boost in fourth-quarter profits, partly due to lower charges and continued price hikes, but higher prices have led to weakened consumer demand for the company’s snacks and drinks.

For the three months ending Dec. 30, PepsiCo earned $1.3 billion, or 94 cents per share, compared with $518 million, or 37 cents per share, a year earlier. I Photo: PepsiCo Facebook

Michelle Chapman reported for the Associated Press (AP), that the New York company expects organic revenue growth of at least 4% this year, less than half the 9.5% growth it achieved in 2023.

Shares dropped 1% before the opening bell despite the company's announcement of a 7% boost to its annual dividend and plans to buy back about $1 billion of its shares.

For the three months ending Dec. 30, PepsiCo earned $1.3 billion, or 94 cents per share, compared with $518 million, or 37 cents per share, a year earlier. Excluding an impairment charge and other items, earnings were $1.78 per share, surpassing the $1.72 per share expected by analysts polled by Zacks Investment Research.

Revenue slipped to $27.86 billion from $28 billion, marking a rare miss for the company. Wall Street had projected revenue of $28.24 billion.

This decline in revenue correlated with a decrease in volume as PepsiCo charged more for products but sold less of them. Frito-Lay North America's volume fell 2% in the final quarter, while beverages in North America saw a 6% decline.

Additionally, volumes for Pepsi convenience foods in Latin America dropped 6%, and there was a 1% decline in Europe. In the Asia Pacific, Australia, New Zealand, and the China region, convenience foods volume fell by 4%.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem