Food and beverage industry leader PepsiCo (NASDAQ: PEP) has released its first-quarter financial results for the 2024 fiscal year, showcasing a mixed performance. The company met analysts’ expectations for revenue and exceeded EPS estimates, but fell short on its operating and gross margins.
PepsiCo’s total revenue grew by 2.3% year-over-year, reaching $18.25 billion, slightly surpassing the consensus estimate of $18.11 billion. Non-GAAP EPS came in at $1.61, outperforming the expected $1.52 and marking a 6% beat.
Despite the revenue growth, PepsiCo faced challenges in driving product demand, as sales volumes declined by 2% year-on-year. To counterbalance this, the company implemented price increases, resulting in organic revenue growth of 2.7%.
Analyzing PepsiCo’s performance over the past two years, the company’s average quarterly sales volumes have experienced a 1.9% contraction. While this decrease is not ideal, PepsiCo’s ability to offset it through price adjustments has allowed them to deliver an average organic revenue growth of 10.9%.
In the latest quarter, PepsiCo’s sales volumes dropped by 2% year-on-year, indicating an ongoing struggle to boost product demand.
Despite these challenges, PepsiCo maintained its full-year guidance from the previous quarter. Notably, the company’s full-year EPS guidance remains in line with consensus estimates.
Overall, PepsiCo’s first-quarter results present a mixed picture. While the company exceeded revenue and EPS expectations, it missed on its operating and gross margins, and its sales volumes continue to face headwinds. The stock’s flat performance after the earnings announcement reflects the market’s cautious optimism about PepsiCo’s ability to address these challenges and sustain its growth trajectory in the coming quarters.
