synopsis

The company now expects full-year earnings per share to decline by 3%, marking a reversal from its earlier forecast, which called for mid-single-digit growth.

PepsiCo (PEP) shares edged lower in pre-market trade Thursday after the beverage and snack giant cut its full-year earnings outlook, citing rising supply chain costs tied to global tariffs.

“As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs,” CEO Ramon Laguarta stated. 

“At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.”

Pepsi reported earnings per share of $1.48, narrowly missing the $1.49 consensus estimate, according to Koyfin. 

Revenue declined 1.8% to $17.92 billion, but came in above the $17.77 billion forecast. Organic revenue, which excludes currency movements, acquisitions, and divestitures, rose 1.2% year-on-year (YoY) in the first quarter (Q1).

The global volume for the company’s convenient foods segment dropped 3%, while it remained flat in beverages. In North America, food volume declined by 1%, while beverages fell by 3%. Laguarta said the company is taking steps to improve regional performance.

“We are actively planning mitigation actions to address these higher supply chain costs where possible,” Laguarta said, adding that the company remains focused on minimizing disruption to operations and relationships. 

“We will continue building upon the successful long-term expansion of our international business while also taking actions to improve performance in North America.”

Pepsi now expects core constant currency EPS for 2025 to be roughly flat from the prior year, down from a previous forecast calling for mid-single-digit growth. Accounting for foreign exchange translation, this implies a 3% decline in core EPS for 2025 compared to $8.27 posted in 2024.

It reaffirmed guidance for low-single-digit organic revenue growth.

Pepsi’s stock fell more than 1% in pre-market trade on Thursday, dragging Coca-Cola (KO) shares lower as well.

Pepsi’s shares have fallen 6% year-to-date and are down more than 18% over the past 12 months. 

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