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PepsiCo (NASDAQ:PEP) has released its financial results for the second quarter of 2025. This article delves into the company’s performance against expectations and provides insights into its future guidance.
PepsiCo Reports Mixed Results in Second-Quarter 2025
In the second quarter of 2025, PepsiCo reported net revenue of $22.726 billion, which slightly exceeded the previous year’s $22.501 billion but fell short of the expected $22.37 billion. The company’s reported earnings per share (EPS) stood at $0.92, a significant drop from the prior year, reflecting a 59% decrease.
However, when adjusted for core results, PepsiCo’s EPS was $2.12, surpassing the anticipated $2.03. This indicates that while the company faced challenges, particularly from foreign exchange impacts and impairment charges, its underlying performance remained robust.
PepsiCo’s organic revenue growth was 2.1% for the quarter, indicating a steady performance in its core operations. The company highlighted improvements in North America, particularly in its beverage and food segments. The international business also showed strong momentum, with notable growth in the International Beverages Franchise and the Europe, Middle East, and Africa (EMEA) regions.
These areas saw organic revenue increases of 5% and 7%, respectively, driven by effective pricing strategies and improved market execution.
Despite these positive indicators, PepsiCo’s overall revenue growth was hampered by a 1.5% negative impact from foreign exchange translation. The company also faced significant impairment charges related to its Rockstar and Be & Cheery brands, which affected its GAAP results. However, PepsiCo’s core constant currency EPS change was a modest 5% decline, reflecting its ability to manage costs and maintain profitability amidst challenging conditions.
PepsiCo Reaffirms Financial Guidance for Remainder of 2025
Looking ahead, PepsiCo has affirmed its financial guidance for the remainder of 2025. The company expects to achieve low-single-digit organic revenue growth, driven by continued expansion in international markets and strategic initiatives in North America. PepsiCo plans to focus on portfolio innovation and cost optimization to enhance growth and profitability. CEO Ramon Laguarta emphasized the importance of these initiatives in improving the company’s competitive position and driving future success.
PepsiCo has also updated its expectations regarding the impact of foreign exchange translation on its financial performance. The company now anticipates a 1.5-percentage-point headwind on reported net revenue and core EPS growth, a reduction from the previously expected 3-percentage-point impact. This adjustment reflects the recent weakening of the U.S. dollar, which has moderated the adverse effects of foreign exchange fluctuations.
In terms of shareholder returns, PepsiCo aims to deliver approximately $8.6 billion in total cash returns for the year. This includes $7.6 billion in dividends and $1.0 billion in share repurchases, underscoring the company’s commitment to returning value to its investors. With a core annual effective tax rate projected at around 20 percent, PepsiCo remains confident in its ability to navigate the current economic landscape and achieve its financial objectives for 2025.
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