PepsiCo’s first-quarter performance exceeded expectations, showcasing the strength of its international business. The company’s revenue reached $18.3 billion, surpassing analysts’ estimates of $18 billion. This 2% increase was primarily driven by robust demand for its snacks and beverages overseas. In North America, Frito-Lay saw a 2% revenue gain, while Pepsi beverage sales rose by 1%. However, a recall of Quaker Oats products due to potential salmonella contamination led to a significant 24% decline in Quaker Foods sales. Despite these challenges, PepsiCo maintained its momentum in international markets, with Asia Pacific and Europe posting impressive sales growth of 11% and 10%, respectively. Europe’s growth was particularly noteworthy considering some countries experienced product shortages on grocery shelves. In January, Carrefour, one of Europe’s largest supermarket chains, had removed PepsiCo products from its stores in several countries due to unacceptable price increases. However, the two companies subsequently resolved their pricing dispute, and Carrefour began restocking PepsiCo products in early April. PepsiCo has consistently raised prices over the past two years to mitigate higher ingredient costs. The fourth quarter of 2022 marked the company’s eighth consecutive quarter of double-digit percentage price increases. These increases moderated in the first quarter, with net pricing rising 5% globally. PepsiCo has attributed some of its volume decline to strategic decisions, such as shrinking package sizes to meet consumer preferences for convenience and portion control. The company’s net earnings increased by 5.6% to $2 billion in the first quarter. Excluding special items, PepsiCo earned $1.61 per share, outperforming Wall Street’s forecast of $1.52. Despite these positive results, PepsiCo shares remained unchanged in premarket trading on Tuesday.
PepsiCo Beats Q1 Revenue Expectations Driven by International Demand
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