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PepsiCo, Inc. (Nasdaq: PEP) has released its results for the second quarter of 2024, showcasing a mixed performance across various segments. The company reported a net revenue of $22.5 billion, a slight increase from the $22.3 billion reported in the same quarter last year. This represents a 0.8% year-over-year growth in net revenue.

The company also saw an improvement in its earnings per share (EPS), which rose to $2.23, marking a 13% increase compared to the previous year. However, the results were influenced by a 1% negative impact from foreign exchange rates.

PepsiCo’s organic revenue growth for the quarter stood at 1.9%, driven by a combination of effective net pricing and volume growth in various regions. Core EPS, a non-GAAP measure, was reported at $2.28, reflecting a 10% increase in constant currency terms.

Despite facing challenges such as subdued category performance in North America convenient foods and product recalls at Quaker Foods North America, the company delivered strong gross and operating margin expansion. Chairman and CEO Ramon Laguarta emphasized the company’s agility in navigating these difficult conditions.
 

PepsiCo Beats EPS Expectations in Q2, Falls Short on Revenue

When compared to market expectations, PepsiCo’s performance in the second quarter of 2024 was mixed. Analysts had anticipated an EPS of $2.16 and revenue of $22.66 billion.

The actual EPS of $2.23 exceeded expectations, showcasing the company’s ability to generate higher-than-expected earnings. However, the reported revenue of $22.5 billion fell short of the expected $22.66 billion. This shortfall can be attributed to several factors, including the negative impact of foreign exchange rates and the challenges faced by the Quaker Foods North America division due to product recalls.

The company’s regional performance also varied significantly. For instance, Frito-Lay North America reported a slight decline in net revenue by 0.5%, while Quaker Foods North America saw a substantial decline of 18%, largely due to the product recalls.

On the other hand, PepsiCo Beverages North America managed to achieve a 1% increase in net revenue. Latin America and Europe reported organic revenue growth of 2% and 7%, respectively, despite facing foreign exchange headwinds. These regional disparities highlight the complex landscape in which PepsiCo operates.
 

PepsiCo Remains Committed to Achieve Approximately 4% Organic Revenue Growth for Full Year 2024

Looking ahead, PepsiCo has updated its financial guidance for the full year of 2024. The company now expects to achieve approximately 4% organic revenue growth, slightly down from its previous guidance of at least 4%.

Despite this slight revision, the company remains confident in its ability to deliver at least 8% core constant currency EPS growth for the year. This guidance is underpinned by several strategic initiatives, including disciplined commercial investments and enhanced productivity measures aimed at driving growth.

PepsiCo also anticipates a core annual effective tax rate of 20% and plans to return approximately $8.2 billion to shareholders through dividends and share repurchases. The company expects to face a 1-percentage-point foreign exchange translation headwind, which will impact reported net revenue and core EPS growth.

These projections imply a 2024 core EPS of at least $8.15, representing a 7% increase compared to the 2023 core EPS of $7.62.

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