PepsiCo’s first-quarter revenue reached $18.3 billion, surpassing analysts’ expectations of $18 billion. This 2% increase was primarily fueled by strong demand for the company’s snacks and beverages internationally. In North America, Frito-Lay and Pepsi beverage sales saw modest growth of 2% and 1%, respectively. However, a recall of Quaker Oats products due to potential salmonella contamination resulted in a 24% decline in Quaker Foods sales.
In contrast, PepsiCo experienced significant sales growth in other regions. Asia Pacific witnessed an impressive 11% sales increase, while Europe saw a 10% rise. Notably, Europe’s growth came despite challenges with product availability on grocery shelves in certain countries. The company’s pricing strategy, which has relied on price increases to combat rising ingredient costs, saw moderation in the first quarter. Net pricing rose by 5% globally, while volumes declined by 2%. PepsiCo attributes some of this volume decline to strategic decisions, including package size reductions to cater to consumer demand for convenience and portion control.
PepsiCo’s net earnings rose by 5.6% to $2 billion in the first quarter. Excluding special items, the company’s earnings per share reached $1.61, exceeding Wall Street’s forecast of $1.52. This positive financial performance contributed to a stable stock price in premarket trading on Tuesday.
