PepsiCo Beats Q1 Revenue Forecasts as Price Increases Moderate

PepsiCo reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.

The Purchase, New York-based company said revenue rose 2% to $18.3 billion for the January-April period. That was higher than the $18 billion Wall Street forecast, according to analysts polled by FactSet.

Pepsi reaffirmed its financial guidance for 2024, including organic revenue growth of 4%. The company has said it expects to return to more normal rates of growth this year after several years of inflation-driven price increases.

That may have disappointed investors who have grown used to stronger growth at PepsiCo. Last year organic revenue grew 9.5%, for example. PepsiCo’s shares fell more than 2.5% in morning trading Tuesday.

In North America, Frito-Lay revenue rose 2% while Pepsi beverage sales were up 1%. Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars, and snacks because of potential contamination with salmonella. Quaker Foods sales dropped 24% during the quarter.

However, the company saw 11% sales growth in Asia Pacific and 10% sales growth in Europe.

PepsiCo Chairman and CEO Ramon Laguarta said the company is optimistic that consumer demand will continue to rise this year in the U.S. and elsewhere.

“The consumer, globally, we think is very resilient,” Laguarta said during a conference call with investors. “It’s basically supported by two facts: very low unemployment or quite low unemployment globally and wages growing at a good pace in the majority of the countries where we participate.”