PepsiCo beats revenue estimates, flags pressure from tighter consumer budgets

[LONDON] PepsiCo beat Wall Street estimates for second-quarter revenue on Thursday (Jul 9), as the beverage giant benefited from resilient demand for zero-sugar sodas in some of its key markets.

The company also kept its annual forecasts unchanged, but said tightening consumer budgets due to rising inflationary pressures had held back growth in North America.

Organic sales for the company’s North America foods business were down about 2 per cent in the reported quarter.

PepsiCo had cut prices on brands such as Lay’s and Doritos in North America to lure back budget-conscious consumers, shifting toward cheaper alternatives and smaller pack sizes amid persistent inflation concerns.

“Results were tempered in the quarter as US food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” CEO Ramon Laguarta said in prepared remarks.

The company’s quarterly revenue rose 6.4 per cent to US$24.18 billion from a year earlier, while analysts estimated 5.4 per cent increase to US$23.95 billion, according to data compiled by LSEG.

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It also posted quarterly core earnings per share of US$2.20, compared with US$2.12 a year ago.

PepsiCo expects fiscal 2026 organic revenue growth in the range of 2 per cent to 4 per cent.

It also expects fiscal 2026 core constant currency earnings per share to rise between 4 per cent and 6 per cent. Shares of the company were up about 1 per cent in premarket trading. REUTERS