PepsiCo (PEP) Q4 2023 earnings

PepsiCo on Friday reported mixed quarterly results as North American demand for its food and drinks weakened.

CEO Ramon Laguarta said that U.S. sales broadly slowed down in the fourth quarter.

“Part of that is a slowdown due to pricing and [consumers’] disposable income situation,” he told investors on the company’s conference call.

He added that U.S. consumers are also shifting their behavior from eating and drinking at home to picking up more of their snacks and Gatorade from convenience stores. But Laguarta expressed optimism about the overall state of the consumer, citing low unemployment and hopes that interest rates will fall by the summer and wages will rise faster than inflation.

Shares of the company fell 3% in morning trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.78 adjusted vs. $1.72 expected
• Revenue: $27.85 billion vs. $28.4 billion expected

Pepsi reported fourth-quarter net income of $1.3 billion, or 94 cents per share, up from $518 million, or 37 cents per share, a year earlier.

Excluding items, the food and beverage giant earned $1.78 per share.

Net sales dropped less than 1% to $27.85 billion. It’s the first quarter since 2020 that the company’s quarterly revenue has declined compared with the year-ago period. Currency exchange rates dragged net sales down by 1.5%.

Pepsi’s organic revenue, which excludes acquisitions and divestitures, rose 4.5% in the quarter, helped by higher prices. But those same raised prices have hurt demand for the company’s food and drinks. Pepsi’s volume, which strips out pricing and currency changes, slid again this quarter.

PepsiCo executives said high borrowing costs and lower personal savings have squeezed consumers’ budgets, particularly in North America, in prepared remarks released…