PepsiCo missed expectations for second-quarter revenue on Thursday as it faced weak demand for its snacks and sodas, mainly in its largest market – the US.
This is the latest in an up-and-down battle the company is facing with high prices and varying demand impacting sales.
Inflation-weary US consumers have cut back on spending on sodas and salty snacks, prompting PepsiCo to double down on promotions and marketing efforts.
These decisions were made to boost volume growth, which has weakened in the past few quarters due to price increases.
Customers are also opting for smaller packs and cheaper alternatives such as those offered by private labels.
Consumers were promoted to make the change when branded packaged-food companies raised prices to cover rising production and raw material costs.
PepsiCo’s average prices jumped 5% for the quarter ending 15 June, while organic volume slipped 3%.
Sales at the North American beverage segment – the company’s largest unit – accounted for about 30.3% of fiscal 2023 total revenue.
Frito-Lay North America – the company’s second largest unit – contributed about 27%.
The company’s net revenue rose to $22.50 billion in the quarter from $22.32 billion a year earlier.
Analysts had estimated $22.57 billion, according to data from the London Stock Exchange Group.
New income attributed to the company rose $3.08 billion – or $2.23 per share – in the latest quarter.
This is up from $2.75 billion – or $1.99 per share – a year earlier.
Read More: PepsiCo To Waive Clause In Bottling Deal As Carlsberg Eyes Britvic Bid
