**Global:** PepsiCo has lowered its full-year earnings forecast due to rising tariff costs and weaker consumer spending. Despite efforts to boost value brands and expand health-oriented products, the company faced a 1.8% revenue drop and expects ongoing volatility amid geopolitical tensions.
PepsiCo has revised its full-year earnings forecast downward, attributing the change to rising tariff costs and a reduction in consumer spending. The multinational company, known for its Pepsi beverages and Frito-Lay snack products, now anticipates its core earnings per share to remain flat compared to the previous year, a notable change from its earlier expectation of mid-single-digit percentage growth.
One significant factor impacting PepsiCo’s financial outlook is the imposition of a 25 percent tariff on imported aluminium, which affects the company alongside other beverage producers. In a bid to address shifting consumer preferences and maintain demand, PepsiCo has invested more in value-focused brands such as Chester’s and Santitas. Additionally, it has introduced more promotions and value packs to attract customers. The company also sought to strengthen its health-oriented product range by acquiring Poppi, a prebiotic soda brand, for $1.95 billion last month.
Despite efforts to adapt, PepsiCo’s net revenue declined by 1.8 percent to $17.9 billion in the first quarter, reflecting a decrease in sales volumes across global markets. This revenue figure slightly surpassed the $17.8 billion anticipated by Wall Street analysts surveyed by FactSet. Net income fell by 10 percent to $1.8 billion during the same period. When adjusting for one-time items, PepsiCo reported earnings of $1.48 per share, marginally below the $1.49 predicted by analysts.
Looking ahead, PepsiCo has indicated it expects “elevated levels of volatility and uncertainty” throughout the remainder of the year. The company noted that ongoing geopolitical tensions have had a negative impact on sales in several markets, contributing to its cautious financial stance.
Source: Noah Wire Services
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