MW PepsiCo no longer sees profit growth in 2025 as tariffs lift supply-chain costs

By Tomi Kilgore

Stock falls as PepsiCo reports a rare quarterly earnings miss as tariffs raise costs, slow consumer spending

Shares of PepsiCo Inc. were headed lower Thursday, after the beverage and snack giant reported a rare miss in quarterly earnings and cut its full-year outlook, citing the negative impacts of global trade friction.

Meanwhile, revenue fell less than expected as beverage sales in North America were flat from a year ago and food sales slipped.

The stock $(PEP)$ lost 1% in premarket trading, heading for a fourth straight weekly decline.

"As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs," said Chief Executive Ramon Laguarta. "At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook."

The company reported net income that fell 10.2% from a year ago to $1.83 billion. Core earnings per share, which excludes nonrecurring items such as restructuring charges, dropped to $1.48 from $1.61, missing the average analyst EPS estimate compiled by FactSet of $1.49.

That marked the first bottom-line miss in at least five years, according to available data from FactSet back to April 2020.

For 2025, the company expects core EPS, when excluding the impact of currency movements, to be about flat with 2024, compared with previous guidance of growth in the mid-single-digit percentage range.

Revenue for the quarter to March 22 was down 1.8% to $17.92 billion, to top the FactSet consensus of $17.76 billion, as sales volumes declined 3% and pricing increased 3%.

In North America, food sales declined 1% while beverage sales were unchanged. Outside of sales from beverage franchises, international sales were weak, particularly food sales in Latin America.

For 2025, PepsiCo said organic revenue, which adjusts for currency and acquisitions or asset sales, is still expected to grow in the low-single-digit percentage range. And the company continues to expect to pay out $7.6 billion to shareholders in the form of dividends and to repurchase $1 billion of its shares.

The stock has slid 6.4% in 2025 through Wednesday, while the Consumer Staples Select Sector SPDR ETF XLP has gained 4% and the S&P 500 index SPX has shed 8.6%.

-Tomi Kilgore

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April 24, 2025 07:01 ET (11:01 GMT)

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