PepsiCo posts rare sales miss as price hikes dent demand

By Thomson Reuters Feb 9, 2024 | 5:05 AM

(Reuters) -PepsiCo missed analysts’ estimates for quarterly revenue and forecast weak organic growth for 2024 as multiple price hikes weigh on demand for its beverages and Lay’s crisps, sending its shares down about 2% before the bell on Friday.

The soda and snacks giant’s net revenue fell 0.5% to $27.85 billion in the fourth quarter, compared to a 1.4% rise to $28.40 billion analysts had expected, according to LSEG data.

PepsiCo is facing some push back as it went ahead with more frequent price hikes since the pandemic to fend off higher costs rising from supply chain disruptions.

The number of units sold by the company’s beverage business in the U.S. fell 8% in November and was down 7% in October and December, according to YipitData.

Carrefour, Europe’s largest food retailer, in January asserted it would not be stocking PepsiCo’s brands “due to unacceptable price increases”.

PepsiCo also forecast annual organic revenue growth of at least 4%, compared to the 9.5% growth reported for fiscal 2023.

Average prices jumped 9% in the quarter ended Dec. 30, while organic volume slipped 4%.

“Category growth rates are normalizing as consumer behaviors largely revert to pre-pandemic norms and net revenue realization moderates as inflationary pressures are expected to abate,” CEO Ramon Laguarta said in a statement.

Still, PepsiCo beat fourth-quarter profit expectations and forecast annual core profit slightly above estimates betting on easing input and freight costs.

PepsiCo expects fiscal 2024 core earnings per share of $8.15, compared to analysts’ expectations of $8.14

The company also announced annualized dividend of $5.42 per share, an increase from $5.06.

On an adjusted basis, PepsiCo earned $1.78 per share, beating estimates of $1.72.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Sriraj Kalluvila)