PepsiCo Slashes Full-Year EPS Outlook to 1%-2% Growth on North America Weakness
PEP is trading near its 52-week low of $123.47 (2.2% above the low).
Summary
PepsiCo cut its full-year adjusted earnings outlook to growth of 1%–2%, down sharply from the prior 4%–6% forecast, citing inflation, higher advertising costs, and continued North American underperformance. CEO Ramon Laguarta said the North American business performed below expectations and that consumer pressure is expected to persist for 12–18 months, and that urgent fixes are needed for the soft drinks business. The company narrowed organic revenue growth guidance to roughly 3% from 2%–4%. Q3 results beat on both top and bottom lines—EPS of $2.34 ex-items vs. $2.29 expected, revenue of $25.27B vs. $24.95B—but the guidance cut dominates. This follows the 8-K filed yesterday that had already trimmed core EPS growth to +2.5%–3.5%; today's update is even more pessimistic. Shares rose 2.2% to $126.38 in morning trading, likely reflecting relief that the cut was not worse, but the stock remains near its 52-week low.
At the time of this announcement, PEP was trading at $126.24 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $172.3B. The 52-week trading range was $123.47 to $171.48. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.