PepsiCo (PEP) quarterly results showed that North American consumers remain under pressure as they focus on essentials and budget for higher gas prices.
The soda and snack giant beat Wall Street’s expectations on both the top and bottom lines, but its North American results weighed on the quarter
Additionally, Americans didn’t stock up on snacks following price cuts of roughly 15% in February on Lay’s, Doritos, Cheetos, and Tostitos. “Results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” Chairman and CEO Ramon Laguarta said in prepared remarks. PepsiCo’s stock fell over 1% in premarket trading. Adjusted earnings per share came in at $2.20 in the fiscal second quarter, more than the $2.19 Wall Street analysts expected.
Pepsi also posted a revenue beat, driven by international results, with sales of $24.2 billion above the $23.9 billion expected. Both revenue growth and pricing for PepsiCo’s snack brands in North America fell by 2% in the quarter, while volume growth was flat in the region. A bright spot in the quarter was portion-control multipacks, which increased in both volume and net revenue.