PepsiCo lowers full-year earnings forecast on tariff costs, lower consumer spending

On Thursday, PepsiCo revised its full-year earnings forecast downward, attributing the adjustment to higher costs resulting from tariffs and a decline in consumer spending. The company, known for its Pepsi beverages and Frito-Lay snacks, now anticipates its core earnings per share to remain on par with last year, compared to the previously projected mid-single-digit percentage increase. The implementation of a 25% tariff on imported aluminum has impacted PepsiCo and other beverage manufacturers. In February, PepsiCo acknowledged that factors such as substantial price hikes over the years and evolving consumer preferences had dampened demand for its products. In response, the company focused on bolstering its value brands, such as Chester’s and Santitas, and introduced more promotions and value bundles. Additionally, PepsiCo enhanced its health-conscious image by acquiring the popular prebiotic soda brand Poppia for $1.95 billion last month. The company foresees continued volatility and uncertainty for the remainder of the year due to geopolitical tensions affecting sales in certain regions. PepsiCo’s net revenue for the first quarter decreased by 1.8% to $17.9 billion as sales volumes declined globally, slightly surpassing the $17.8 billion projection by Wall Street analysts. Net income for the New York-based company dropped by 10% to $1.8 billion, with an adjusted earnings per share of $1.48, slightly below the $1.49 estimate by analysts. Prior to the market opening on Thursday, PepsiCo’s shares declined by 1%.