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The
company, based in Purchase, New York, said Tuesday it now
expects its organic revenue -- which is adjusted for foreign
currency exchanges and the impact of product acquisitions or
divestments – to increase in the low single-digit range for the
year. It had expected an increase of 4%.
PepsiCo said its performance in North America was “subdued,”
hurt by a big recall of its Quaker Oats granola bars and cereals
as well as weak demand for its Frito-Lay snacks and drinks.
Frito-Lay North America's sales volumes slipped 1.5%, while
North American beverage volumes fell 3%.
Consumers began to push back on higher prices this summer after
years of increases, and PepsiCo vowed to lower the cost of some
products like potato chips and tortilla chips. Frito-Lay prices
edged up by just 0.5% in the third quarter, the company said.
Globally, PepsiCo said it raised prices 3%. Sales volumes were
down in every market except Europe.
Third quarter revenue was flat at $23.3 billion. Wall Street had
expected revenue of $23.8 billion, according to analysts polled
by FactSet. PepsiCo's quarterly revenue growth — which had
frequently grown by double-digits in recent years — has slowed
sharply in the last few quarters.
Net income fell 5% to $2.9 billion, or $2.13 per share. Adjusted
for one-time items, PepsiCo earned $2.31 per share, which was
higher than the $2.29 per share analysts were expecting.
PepsiCo shares fell 1% in premarket trading.
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