AP – PepsiCo lowered its organic revenue forecast for the year after United States (US) consumers continued to pull back on buying its snacks and drinks.
The company, based in Purchase, New York, said yesterday it now expects its organic revenue – which is adjusted for foreign currency exchanges and the impact of product acquisitions or divestments – to increase in the low single-digit range for the year.
It had expected an increase of four per cent.
PepsiCo said its performance in North America was “subdued”, hurt by a big recall of its Quaker Oats granola bars and cereals as well as weak demand for its Frito-Lay snacks and drinks.
Frito-Lay North America’s sales volumes slipped 1.5 per cent, while North American beverage volumes fell three per cent.
Consumers began to push back on higher prices this summer after years of increases, and PepsiCo vowed to lower the cost of some products like potato chips and tortilla chips.
Frito-Lay prices edged up by just 0.5 per cent in the third quarter, the company said.
Globally, PepsiCo said it raised prices three per cent. Sales volumes were down in every market except Europe.
Third quarter revenue was flat at USD23.3 billion. Wall Street had expected revenue of USD23.8 billion, according to analysts polled by FactSet.
PepsiCo’s quarterly revenue growth – which had frequently grown by double-digits in recent years – has slowed sharply in the last few quarters. Net income fell five per cent to USD2.9 billion, or USD2.13 per share.
Adjusted for one-time items, PepsiCo earned USD2.31 per share, which was higher than the USD2.29 per share analysts were expecting.
PepsiCo shares fell one per cent in pre market trading.
