PepsiCo (PEP) exceeded Q3 revenue ($23.94 billion) and adjusted EPS ($2.29) estimates, leading to a modest premarket stock increase. While its North America Beverages and international segments demonstrated resilience, the U.S. snacking business experienced a 3% volume decline, indicating ongoing challenges. The company reiterated its fiscal 2025 guidance for low-single-digit organic revenue growth and flat core constant currency EPS, amid activist investor Elliott Management's $4 billion stake and calls for a turnaround, with PEP's stock significantly underperforming rival Coca-Cola year-to-date. A CFO transition was also announced.
PepsiCo (PEP) beat Wall Street projections on both the top and bottom line in its third-quarter results, but its US snacking business continues to see turbulence. PepsiCo stock rose almost 1% in premarket trading on Thursday. Revenue came in at $23.94 billion, slightly beating Wall Street's expectations of $23.85 billion, per Bloomberg consensus data. Adjusted earnings per share came in at $2.29, beating the expectations of $2.27. In North America, its beverage business offset an ongoing slowdown in its food business. Revenue for beverages for the quarter grew 2%. Chairman and CEO Ramon Laguarta said its, the "net revenue growth accelerated and reflects the resilience of our international business, improved momentum within North America Beverages and the benefits of our portfolio reshaping actions." PepsiCo, Inc. (PEP) The trademark Pepsi grew both volume and net revenue growth, and the company said its hydrating offerings like Proper delivered strong volume too. It also said the acquisition of poppi for $1.95 billion is paying off, with an increase of more than 50% in retail sales from a year ago. As of early September, its now a part of PepsiCo's distribution system in early September. The company said it is "excited about its growth potential." As the snacking slowdown continues in the US, its food business remains under pressure. Food volume fell 3% as it "continues to work towards improving its performance trajectory with a high sense of urgency." That was offset by 5.5% revenue growth in its Europe, Middle East and Africa business and 4% growth in Latin America. Meanwhile, activist pressure is building in the background. In September, activist investor Elliott Management disclosed a $4 billion stake in the company, calling for a turnaround. Its stock is down nearly 8% year-to-date as rival Coca Cola (KO) is up roughly 6%. The company reiterated its fiscal 2025 guidance. It still expects low-single-digit organic revenue growth with core constant currency earnings per share to be approximately even with the prior year. The company also announced its CFO Jamie Caulfield will retire and Steve Schmitt will take the role, effective November 10. Board member Darren Walker, who is President of the Ford Foundation, also plans to leave the board, effective November 19. — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com. Click here for all of the latest retail stock news and events to better inform your investing strategy PepsiCo (PEP) reported a Q3 beat on both revenue ($23.94 billion vs. $23.85 billion consensus) and adjusted EPS ($2.29 vs. $2.27 consensus), leading to a nearly 1% increase in premarket trading. This performance was largely driven by an improved momentum in North America Beverages, which saw 2% revenue growth, and robust international operations. International segments demonstrated significant resilience, with Europe, Middle East, and Africa revenue growing 5.5% and Latin America growing 4%. Strategic acquisitions like poppi are paying off, showing over 50% retail sales growth and contributing to overall portfolio reshaping, as highlighted by CEO Ramon Laguarta. However, the U.S. snacking business remains a point of turbulence, with food volume falling 3% as the company works to improve its performance trajectory. This domestic weakness is juxtaposed against a year-to-date stock decline of nearly 8%, significantly underperforming rival Coca-Cola (KO) which is up approximately 6%. The company reiterated its fiscal 2025 guidance for low-single-digit organic revenue growth and core constant currency EPS approximately even with the prior year. The presence of activist investor Elliott Management, with a $4 billion stake and calls for a turnaround, alongside recent CFO and board member transitions, signals potential strategic shifts ahead.
AI-powered research, real-time alerts, and portfolio analytics for institutional investors.
Request a DemoOverall Sentiment
mixed
Sentiment Score
0.15
Ticker Sentiment
