Did PepsiCo Beat Wall Street Estimations 2023?

Did PepsiCo Beat Wall Street Estimations 2023?

PepsiCo, the renowned snacking and beverage giant, has exceeded Wall Street's expectations for third-quarter earnings and revenue. The company also raised its full-year earnings outlook, prompting a 2% increase in its premarket trading shares.

The third quarter yielded earnings per share of $2.25, beating the expected $2.15, and generated revenue of $23.45 billion, surpassing the anticipated $23.39 billion. For 2023, Pepsi now predicts a 13% growth in constant currency earnings per share, up from its earlier projection of 12%. This marks the third consecutive quarter that PepsiCo has raised its full-year forecast.

Pepsi's third-quarter results showcased a net income of $3.09 billion, or $2.24 per share, compared to $2.7 billion and $1.95 per share the previous year. Excluding items, the company earned $2.25 per share. Net sales climbed by 6.7% to reach $23.45 billion, while the firm's organic revenue, which excludes acquisitions and divestitures, surged by 8.8% during the quarter.

However, PepsiCo experienced a decline in volume, impacted by pricing adjustments and currency fluctuations. The company attributed this to its strategy of offering more affordable options to consumers, resulting in lower volume sold.

Pepsi's North American beverages unit faced a volume drop of 6%, primarily due to price hikes implemented to offset inflation. The company also decreased certain promotions, which led to a reduction in volume, despite driving gains during the promotional period.

Notably, there were positive trends in beverages, with Gatorade witnessing double-digit revenue growth. PepsiCo also plans to relaunch the popular Mountain Dew Baja Blast flavor, available exclusively at Taco Bell. In contrast, the company's North American food divisions performed better, with Quaker Foods North America's volume increasing by 1%, and Frito-Lay North America's volume remaining stable.

Looking forward to 2024, Pepsi anticipates organic revenue growth in the range of 4% to 6% and core constant currency earnings per share growth in the high single digits.

PepsiCo Stock Rises on Strong Earnings

PepsiCo's stock showed a positive uptick after the company released its third-quarter earnings, surpassing Wall Street expectations. The beverage and snacks giant reported earnings and revenue figures that exceeded analysts' predictions, leading to a 2.3% gain in share value during Tuesday afternoon trading market. This surge marked one of the most significant percentage increases for PepsiCo's stock since July 2023, based on Market Data.

What's more, PepsiCo revealed its optimistic outlook for fiscal 2024, anticipating that financial results will likely land at the higher end of their previously provided guidance.

PepsiCo’s Challenges in a Competitive Market

Despite this recent boost, PepsiCo's stock performance has been under scrutiny throughout the year, with a decline of 8.7% year-to-date. This trajectory marks the company's toughest year since 2008, as investors have expressed concerns regarding the impact of emerging weight loss drugs like Ozempic and Mounjaro on the snack industry.

While PepsiCo celebrates its recent earnings success, it remains vigilant in the face of industry challenges, aiming to continue providing value to investors and consumers alike.

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