Pepsi beat Wall Street estimates for profit in the fourth quarter but missed on revenue. The stock was falling.
The maker of Pepsi, Dr Pepper, and Mountain Dew sodas said that adjusted earnings per share were $1.96 in the final three months of 2024. Analysts polled by FactSet expected earnings of $1.94. Revenue came in at $27.784, billion slightly below expectations.
Pepsi shares fell 2.4% in premarket trading to $146.69.
Investors will watch how PepsiCo plans to boost sales in 2025 as the soda giant is set to report fourth-quarter earnings on Tuesday before the market opens.
For the three months ended in December, analysts polled by FactSet expect the snack and beverage giant to post earnings of $1.94 per share, up 9% from the same period last year. Sales are expected to come at $27.89 billion, roughly flat from a year ago.
Last quarter, the firm missed sales estimates and trimmed its full-year outlook to a low-single-digit increase in organic revenue. Shares have declined 12% over the past 12 months.
Pepsi's revenue was hurt by subdued trends in the North America market, with numbers particularly disappointing in the Quaker Foods business, which suffered from a fallout due to product recalls in 2024.
Pepsi, along with many packaged-food companies, has faced some challenges over the past year. Consumers are pulling back from spending amid inflation pressure, while the rising popularity of GLP-1 weight-loss drugs could further dampen appetite for snacks and sugary drinks.
This year, Donald Trump's administration might bring more changes that could negatively affect the food industry, including more prominent labels about harmful ingredients, restrictions on food additives, and cuts to the food stamp program that many low-income households rely on for consumption.
On top of the regulatory pressure, there is also a general trend toward healthier foods. Pepsi's most popular products have historically catered to taste rather than health. The company has been working to evolve its portfolio toward more health and wellness options.
Still, uncertainties facing Pepsi might be priced in already, and the company's diversified portfolio of beverages and snacks across many international markets could give it more stability and growth potential than some peers.
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