In a move that may signal a shift in consumer spending habits, PepsiCo has revised its revenue projections downward for the year, citing sluggish sales of its snack and beverage products in the US market. The multinational corporation, headquartered in Purchase, New York, now anticipates a low single-digit increase in organic revenue, a significant departure from its initial forecast of 4% growth.
The company’s performance in North America was lackluster, with sales volumes of Frito-Lay snacks and drinks declining by 1.5% and 3%, respectively. A major recall of Quaker Oats granola bars and cereals also contributed to the downturn. In response to weakening demand, PepsiCo has pledged to reduce prices on certain items, such as potato chips and tortilla chips, in an effort to stimulate sales.
Globally, the company implemented a 3% price hike, but sales volumes still fell in every market except Europe. Revenue for the third quarter remained stagnant at $23.3 billion, falling short of Wall Street’s expectations of $23.8 billion. Net income also took a hit, decreasing by 5% to $2.9 billion, or $2.13 per share. However, adjusted earnings per share of $2.31 surpassed analyst predictions of $2.29. In response to the news, PepsiCo’s shares dipped 1% in premarket trading.
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