By Ananya Mariam Rajesh
(Reuters) -PepsiCo beat Wall Street expectations for first-quarter revenue and profit on Tuesday as demand held steady for the soda and snacks giant’s Tropicana juices and Cheetos in its international markets.
Consumers have shelled out money for PepsiCo (NASDAQ:)’s Lays chips and 7UP products across markets including Europe, Asia Pacific and China, helping offset a slowdown witnessed in its major market United States.
PepsiCo’s international business accounted for about 40% of its total fiscal 2023 revenue, while its North America businesses accounted for the remaining.
Several rounds of price hikes in the U.S. have led consumers to push back on PepsiCo’s products as sticky inflation makes customers cautious about spending.
PepsiCo also maintained its fiscal 2024 forecasts of organic sales growth of 4% and core profit expectation of $8.15 per share.
The company’s shares were down marginally in premarket trading.
First-quarter sales at PepsiCo’s largest business, its North America beverage unit, rose 1%, while organic volume fell 5%.
Total sales at its Quaker Foods North America unit fell 24% following Quaker product recalls first made in December in the U.S. due to a potential Salmonella contamination.
PepsiCo executives said they expect the company’s North America businesses to gradually improve as impacts associated with product recalls moderate.
Average prices jumped 5% for the quarter ended March 23. Organic volume slipped 2%, compared with a fall of 4% in the fourth quarter of 2023.
“There is clearly plenty of wariness among shareholders, who are keen to see the tide start to turn on volumes in the United States in the near future,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
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PepsiCo’s first-quarter net revenue rose 2.3% to $18.25 billion, beating LSEG estimates of $18.07 billion.
Excluding items, PepsiCo earned $1.61 per share, topping expectations of $1.52.
