PepsiCo reported second-quarter results on Thursday that beat revenue forecasts but fell slightly short on adjusted earnings, as weakness in North American food and beverage sales offset strong performance abroad.
On an adjusted basis, the company earned $2.20 per share, one cent below the $2.21 consensus estimate tracked by CNBC
Total net revenue of $24.18 billion represented a 6.4% year-over-year increase and cleared the $23.95 billion Wall Street target. Stripping out currency movements, acquisitions and divestitures, organic revenue climbed 2.4%. Geographically, the picture was split.
Overseas divisions — including Asia Pacific Foods, International Beverages Franchise, and Europe, Middle East and Africa — all recorded organic volume gains, making international operations the company’s main source of momentum. At home, the beverages unit suffered a 4% volume drop and the convenient foods segment ended the quarter flat. “Our North America business was softer than we anticipated in the second quarter, and we now expect a more gradual improvement in performance trends for the balance of this year,” Chief Financial Officer Steve Schmitt said in prepared remarks. Chairman and CEO Ramon Laguarta pointed to tighter consumer budgets as a headwind. “Results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” he said in prepared remarks.