PepsiCo’s Q1 Triumph: Surges to $18.25 Billion in Net Revenue, Outperforms Predictions

With successive price hikes in the U.S., consumers in the region have exhibited resistance towards the company’s soft drinks and fruit juices, prompted by persistent inflation that is nudging them to be prudent in their expenditures.

On Tuesday, PepsiCo defied the projections of Wall Street, registering a higher-than-anticipated revenue for the first quarter, buoyed by sustained demand for its Tropicana juices and iconic Cheetos in global markets.

Despite a sluggish performance in its primary market, the United States, consumers abroad displayed resilience by continuing to invest in PepsiCo’s beloved Lays chips and 7UP beverages, offsetting the downturn observed domestically.

The international segment of PepsiCo’s business contributed significantly, constituting approximately 40% of its total revenue for the fiscal year 2023.

During the quarter ending March 23, PepsiCo witnessed a 5% surge in average prices, albeit experiencing a 2% dip in organic volume, a notable contrast to the 9% average price hike witnessed in the preceding quarter of 2023.

While the North American beverage unit, PepsiCo’s cornerstone business, observed a modest 1% rise in sales in the first quarter, organic volumes witnessed a 5% decline.

PepsiCo’s net revenue for the quarter escalated to $18.25 billion from $17.85 billion compared to the previous year, surpassing analyst estimates pegged at $18.07 billion, as per LSEG data.

The company remained steadfast in its annual forecasts for organic sales and core profits.

On an adjusted basis, PepsiCo posted earnings of $1.61 per share, exceeding analyst projections of $1.52 per share.