PepsiCo profits up as charges fade but sales slip after price rises

9 February 2024, 15:54

Earns PepsiCo
Earns PepsiCo. Picture: PA

Shares dropped 3% at the opening bell even as the company announced a 7% boost to its annual dividend.

PepsiCo got a bump to fourth quarter profits thanks in part to lower charges and continued price rises, but higher prices have weakened consumer demand.

The food and drinks company said on Friday that it expects organic revenue growth of at least 4% this year. That is less than half the 9.5% growth that PepsiCo booked in 2023.

Shares dropped 3% at the opening bell even as the company announced a 7% boost to its annual dividend, and said that it would buy back about one billion dollars-worth (£0.8 billion) of its shares.

For the three months ending December 30, PepsiCo earned 1.3 billion dollars (£1.03 billion), or 94 cents per share. That compares with 518 million dollars (£410 million), or 37 cents per share, a year earlier.

Excluding an impairment charge and other items, earnings were 1.78 dollars per share. The performance topped the 1.72 dollars per share analysts polled by Zacks Investment Research expected.

Revenue slipped to 27.86 billion dollars (£22.09 billion) from 28 billion dollars (£22.20 billion) and it was a rare miss for the company. Wall Street had projected revenue of 28.24 billion dollars (£22.39).

Pepsi has wrestled with higher prices and how to pass those costs on, raising prices by double-digit percentages for several quarters.

Carrefour said last month that it will stop selling PepsiCo products in its stores in France, Belgium, Spain and Italy because of price increases (Alamy/PA)

Global supermarket chain Carrefour said last month that it will stop selling PepsiCo products in its stores in France, Belgium, Spain and Italy because of price increases for popular items such as Lay’s potato chips, Quaker Oats, Lipton Iced Tea and its namesake soda.

PepsiCo said at the time that it would continue to engage in good faith with Carrefour to try to ensure that it products remained available.

Its profits are up, though higher prices have dragged down sales as people trade down to cheaper brands. PepsiCo has been shrinking package sizes of some products in that environment.

PepsiCo Inc, based in Purchase, New York, has said price increases should ease and largely align with inflation, which has fallen considerably.

PepsiCo has pointed to higher costs for grain and cooking oil as it has raised prices. Costs for those food commodities surged following Russia’s invasion in Ukraine but have since retreated on global markets from record highs in 2022.

By Press Association

Latest World News

See more Latest World News

Australia Double Fatality

Police asked not to march at Sydney Mardi Gras parade after alleged murders

Emmanuel Macron

Putting Western troops on the ground in Ukraine not ‘ruled out’, says Macron

Israel Palestinians

Biden ‘hopes Hamas ceasefire and hostage deal can take effect by next Monday’

James Cleverly is expected to address global leaders on Tuesday.

West must 'help people thrive in their own countries' to tackle migrant crisis, James Cleverly says

Don Henley

I never gave away draft lyrics of Hotel California, Eagles singer tells trial

Sweden's Prime Minister Ulf Kristersson and Prime Minister of Hungary Viktor Orbán

Hungary approves Sweden's bid to join Nato as the military alliance expands in the face of Russia's war in Ukraine

Election 2024 Trump

Judge in Trump hush-money case asked to issue gag order on former president

Hungarian parliament

Hungary’s parliament votes to ratify Sweden’s application to join Nato

St. Vincent Grenada Hijacked Yacht

Hijackers threw elderly couple overboard after capturing yacht, police say

Father Felice Palamara was presiding over Mass in the small town of Cessaniti, Calabria, in the southern region of Italy when he noticed an acrid smell coming from the wine

Priest handed poisoned chalice after mafia hitman spikes holy communion wine with bleach

WTO director-general Ngozi Okonjo-Iweala

Global economy weighed down by war, uncertainty and instability, says WTO chief

Donald Trump and his lawyers

Trump to appeal against £350m judgment made against him in fraud lawsuit

Damaged buildings seen after Russian forces completed their takeover of Avdiivka

Ukrainian troops pull back again amid Russia’s onslaught in east of country

Tunisian Imam Mahjoub Mahjoubi speaks at his home in the town of Soliman, February 23

Imam deported from France after labelling tricolore flag 'satanic' despite living in the country for 40 years

Gerard Depardieu

French actor Gerard Depardieu faces another sexual assault complaint

A Lebanese army vehicle blocks a road leading to a warehouse which was destroyed by Israeli air strikes

Israel’s air force attacks Hezbollah targets ‘deep inside Lebanon’