PepsiCo fell short of Wall Street estimates for fourth-quarter revenue and forecast weak organic growth for 2024 as the soda and snacks giant's multiple price hikes crimp demand for its juices and Lay's crisps.
The soda and snacks giant's net revenue fell 0.5% to $27.85 billion (€25.86 billion) in the fourth quarter, compared to a 1.4% rise to $28.40 billion (€26.35 billion) analysts had expected, according to LSEG data.
The cola giant's shares fell 1.6% in premarket trading.
PepsiCo and other retailers are now facing some resistance to the multiple price hikes undertaken since the pandemic to fend off higher costs caused by supply chain disruptions.
Carrefour, Europe's largest food retailer, in January asserted it would not be stocking PepsiCo's brands 'due to unacceptable price increases'.
Highlights
PepsiCo's average prices jumped 9% for the quarter ended 30 December, while organic volume slipped 4%.
"The volumes again are not kind of performing...they are not getting the improvement in tandem with the moderating levels of pricing... that is likely going to be a headwind for them over the near term," Wedbush analyst Gerald Pascarelli said.
The company also forecast annual organic revenue growth of at least 4% compared to the 9.5% growth reported for fiscal 2023.
PepsiCo expects fiscal 2024 core earnings per share of $8.15, compared to analysts' expectations of $8.14.
"Category growth rates are normalising as consumer behaviours largely revert to pre-pandemic norms and net revenue realisation moderates as inflationary pressures are expected to abate," CEO Ramon Laguarta said in a statement.
The company also announced annualised dividend of $5.42 per share, an increase from $5.06.
On an adjusted basis, PepsiCo earned $1.78 per share, beating estimates of $1.72.
In January, the company appointed Ram Krishnan as the chief executive officer of PepsiCo Beverages North America.
Krishnan succeeded Kirk Tanner, who retired from PepsiCo on 2 February, after 32 years with the company.
