PepsiCo's revenue fell slightly in the fourth quarter as North American consumers continued to pull back on purchases of Frito-Lay snacks and drinks.
The Purchase, New York, company reported revenue of $27.78 billion for the October-December period Tuesday. That was short of Wall Street's forecast of $27.89 billion, according to analysts polled by FactSet.
PepsiCo shares fell 2.6% in premarket trading Tuesday.
PepsiCo warned last fall about “subdued” demand in North America. That was partly because of a big recall of Quaker Oats granola bars and cereals. But customers have also been skipping snacks — or switching to cheaper brands — after years of price increases.
Net pricing rose 3% globally in the fourth quarter, PepsiCo said Tuesday.
PepsiCo said it has been working to make its snacks more affordable, adding product promotions, more chips per bag, mini canisters and value packs. The company said it is also growing its Chester's and Santitas value brands, which saw strong revenue growth last year.
On the beverage side, PepsiCo spent more on marketing, focusing on strong performers like Pepsi Zero Sugar, Propel and Gatorade.
PepsiCo's snack food and beverage volumes both climbed 1% globally in the fourth quarter, with strong growth in Africa and Asia. But snack food and beverage sales dropped 3% in North America.
Net income rose 17% to $1.5 billion. Adjusted for one-time items, PepsiCo earned $1.96, or two cents better than analysts had forecast.
PepsiCo expects organic revenue growth in the low single digits in 2025. Organic revenue is adjusted for foreign currency exchanges and the impact of product acquisitions or divestments. The company reported organic revenue growth of 2% in 2024.
The company, which closed four U.S. bottling plants in October, also plans to continue a multi-year push to enhance productivity, including adding more automation in its plants and warehouses.
Credit: AP
Credit: AP