PepsiCo (PEP, Financial) just dropped its latest earnings, and while the numbers weren't a total disaster, they weren't exactly a slam dunk either. The market is not so excited, sending shares down by nearly 4.5% by 2.11pm today. The company reported adjusted earnings per share of $1.96, slightly ahead of expectations, but revenue missed the mark at $27.78 billion. The real concern? U.S. consumers are pulling back. North American beverage volume fell 3%, Frito-Lay dropped 3%, and Quaker Foods took the biggest hit, down 6%. But there were a few bright spots—Gatorade gained market share, and Mountain Dew Baja Blast raked in over $1 billion in annual sales.
Despite the sluggish domestic performance, PepsiCo's leadership is betting big on a rebound in 2025. The company is doubling down on fast-growing categories like protein drinks, banking on rising demand from consumers using GLP-1 weight loss drugs. International markets also held up better, offsetting some of the pain at home. While foreign exchange dragged down overall revenue, organic sales still grew 2.1%, showing PepsiCo's global strength isn't fading just yet.
Looking ahead, PepsiCo expects low-single-digit organic revenue growth and a mid-single-digit increase in earnings per share for 2025. To sweeten the deal for investors, the company is hiking its annual dividend by 5% to $5.69 per share. The real question now: Can PepsiCo turn its North American struggles around, or will it keep leaning on international markets to do the heavy lifting? Investors will be watching closely to see if the turnaround talk translates into real results.
