PEP Stock Tumbles After Q2 Earnings – CEO Flags Consumer Budgets Tightening In US From Inflationary Pressures

During the second quarter, PepsiCo’s International segment's organic revenue grew 7%, while North America's organic revenue declined 0.5%.

• PepsiCo reported Q2 revenue of $24.18 billion and adjusted earnings per share of $2.20.
• For the full year, the company continues to expect core constant currency EPS growth of 4% to 6%.
• The company is anticipating higher input cost inflation in the second half of the year.

Shares of PepsiCo Inc. (PEP) tumbled on Thursday after the food and beverage giant reported a second-quarter profit miss and flagged lower consumer spending in its main U.S. market.

At the time of writing, PEP stock was down more than 1% premarket and was among the top trending tickers on Stocktwits.

PEP’s International Business Outpaces North America

During the second quarter (Q2), PepsiCo’s International segment organic revenue grew 7%. That strength was overshadowed by a 0.5% fall in North American organic revenue due to weak U.S. food and beverage consumer trends, the company said.

“Results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” said CEO Ramon Laguarta. “North America’s core operating margin contracted in the second quarter and reflects investments related to certain affordability investments in the convenient foods business and volume and channel mix pressures within the beverages business.”

Q2 Results At A Glance

For Q2, PepsiCo reported revenue of $24.18 billion, ahead of the consensus estimate of $ 23.95 billion, according to data from Fiscal AI. However, core earnings per share came in at $2.20, one cent below the consensus estimates of $2.21 per share.

For the full year, the company continues to expect core constant currency EPS growth of 4% to 6% and organic revenue growth of 2% to 4%. Fiscal AI has polled a consensus estimate of $8.64 in adjusted EPS and $98.84 billion in revenue.

Moreover, the company said it is also anticipating higher input cost inflation in the second half of the year, but expects savings from expense reduction and tariff refund claims to offset much of the higher costs.

What Retail Traders Think About PEP

On Stocktwits, retail sentiment toward PEP stock remained in ‘bullish’ territory over the last 24 hours.

PEP stock has fallen nearly 1% so far this year but has gained more than 5% over the last 12 months.

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