PepsiCo Defies North American demand โSlump with Strong Third quarterโค Results
PURCHASE, N.Y.- October 26, 2023 – PepsiCo Inc. today reported robust thirdโฃ quarter sales, exceeding analyst expectations despite acknowledging weakeningโ demandโข for itsโฃ drinks and snacksโ in North America. Theโ company’s netโ income decreased 11% to $2.6 billion, but adjusted earningsโ perโ share reached $2.29, surpassingโข the predicted $2.26.
The results come as PepsiCo navigates shifting consumer preferences and โขinflationary pressures, while together facing scrutiny โขfrom activist investor Elliott Investment Management. โฃThe company’s performance underscores itsโค ability to adapt โคto challenging market conditions, but also highlights ongoing concernsโ about its North American market share and growth potential. The appointment of aโ new CFO signals a potentialโค shift in financial strategy as PepsiCo prepares forโฃ continuedโ economic uncertainty and investor pressure.
PepsiCo has been activelyโข addressing consumer concerns about product pricing by expanding theโฃ availability of value brands like Chester’s and Santitas. Simultaneously, the company is accelerating itsโ commitment to removing artificial colors from its product lines, including Gatorade and Cheetos.โข These initiatives are part of a broader strategy to maintain consumerโ loyalty and โฃappeal to evolving health-conscious trends.
Elliott Investment Management, which recently acquired โคa $4 billion stake in PepsiCo, has publicly urged the company โขto streamline its portfolio and reinvest in core brands such as Mountain Dew, as well as โฃexplore opportunities in emerging โฃcategories like protein snacks. โThe firm also suggested refranchising PepsiCo’s North American bottlers, mirroring a move made by Coca-Cola in 2017. Elliott’s letterโ to the PepsiCo board last โขmonthโค cited a โloss of โฃmarket share in North American beverages and slowing growth in theโ food sector as key areas of concern.
Effective November 10, PepsiCo will welcome Steve Schmitt, currentlyโ the CFO of Walmart’s U.S. division, as โits new chief financial officer. Heโค will replace Jamie Caulfield, who is retiring after more than 30 โyears with theโ company andโ will remain in an advisory role โuntil May 15. Shares of PepsiCo Inc. were slightly up in pre-market trading.