PepsiCo reported mixed quarterly results on Tuesday as demand for its snacks and beverages in North America declined for the fifth consecutive quarter. Shares of the company ended the day down more than 4%.
For the fourth quarter, PepsiCo posted net income attributable to the company of $1.52 billion, or $1.11 per share, up from $1.3 billion, or 94 cents per share, in the same period a year ago.
Excluding restructuring costs, impairment charges, and other adjustments, the company reported earnings of $1.96 per share. Net sales saw a slight decline, totaling $27.78 billion.
PepsiCo’s organic revenue, which strips out the impact of acquisitions, divestitures, and foreign exchange fluctuations, grew by 2.1% during the quarter.
Globally, the company’s volume increased by 1% for convenient foods and 1% for beverages. These figures exclude the effects of pricing and currency fluctuations.
However, demand in PepsiCo’s primary market, North America, remained weak. The company has previously noted that U.S. consumers are becoming more cautious, snacking less frequently and making fewer impulse purchases at convenience stores.
Despite this trend, executives remain optimistic about a rebound in the region.
“We’re very confident that our North American business will accelerate this year. We’re confident in our plans … and we see opportunities, especially away from home,” CEO Ramon Laguarta told analysts during the company’s earnings call.
Pepsico CompanyFrito-Lay North America reported a 3% decline in volume for the quarter, as consumers continued to tighten their grocery budgets in response to several years of elevated food prices and interest rates.
“In 2024, the salty and savory snack categories underperformed broader packaged food, following multiple years in which these categories had outperformed packaged food,” Laguarta and CFO Jamie Caulfield noted in prepared remarks.
The company’s North American beverage division also experienced a 3% drop in quarterly volume. However, certain brands within the portfolio performed well, with Gatorade gaining market share and Mountain Dew Baja Blast surpassing $1 billion in annual sales.
PepsiCo executives also highlighted plans to expand further into the protein drinks sector, which is experiencing rapid growth, partially driven by the increased use of GLP-1 medications.
Quaker Foods North America, still recovering from a product recall in December, saw its volume decline by 6% during the quarter. The company expects Quaker’s performance to improve in 2025 as it moves past the lingering effects of the recall, according to prepared statements from executives.
Looking ahead to 2025, PepsiCo forecasts a low-single-digit increase in organic revenue and a mid-single-digit rise in core constant currency earnings per share.
“Looking ahead to 2025, we will continue to build upon the successful expansion of our international business, while also taking actions to improve performance in North America,” Laguarta said in a statement.
