Published 17:03 IST, April 23rd 2024

PepsiCo beats expectations in Q1, fuelled by strong international demand

Consumers' continued preference for Lays chips and 7UP across Europe, Asia Pacific, and China has helped mitigate a slowdown observed in its primary market.

Reported by: Business Desk
Follow: Google News Icon
  • share
PepsiCo's first-quarter net revenue climbed by 2.3% to $18.25 billion | Image: Unsplash

PepsiCo has outperformed Wall Street predictions for first-quarter revenue and profit, buoyed by consistent demand for its Tropicana juices and Cheetos in international markets.

Consumers' continued preference for PepsiCo's Lays chips and 7UP beverages across Europe, Asia Pacific, and China has helped mitigate a slowdown observed in its primary market, the United States.


With international operations contributing approximately 40 per cent of its total fiscal 2023 revenue, PepsiCo's North America businesses accounted for the remaining share.

Despite facing challenges from multiple rounds of price increases in the US, which have prompted consumer resistance amid concerns over inflation, PepsiCo has maintained its fiscal 2024 forecasts of organic sales growth at 4 per cent and core profit expectations at $8.15 per share.


In premarket trading, PepsiCo's shares experienced marginal declines following the earnings announcement.

First-quarter sales at PepsiCo's largest business, its North America beverage unit, increased by 1 per cent, while organic volume declined by 5 per cent. Conversely, total sales at its Quaker Foods North America unit dropped by 24 per cent due to product recalls initiated in December following potential Salmonella contamination.


PepsiCo executives anticipate gradual improvements in the company's North America businesses as the impacts associated with product recalls subside.

Average prices surged by 5 per cent for the quarter ending March 23, while organic volume saw a 2 per cent decline, compared to a 4 per cent drop in the fourth quarter of 2023.


Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, noted shareholders' cautious optimism regarding the reversal of volume trends in the United States in the near future.

PepsiCo's first-quarter net revenue climbed by 2.3 per cent to $18.25 billion, surpassing estimates of $18.07 billion. Excluding items, PepsiCo earned $1.61 per share, exceeding expectations of $1.52.


The company's robust performance underscores its resilience amid market challenges, driven by sustained international demand and strategic operational adjustments.

(With Reuters inputs)

17:03 IST, April 23rd 2024