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Investing.com - PepsiCo (NASDAQ:PEP) has reported per-share income in the fourth quarter that topped estimates, although organic revenue growth was more tepid than anticipated as price hikes weighed on demand from cost-conscious U.S. shoppers.
The food and beverage firm behind brands like Frito-Lay potato chips and Mountain Dew soda posted a 2.1% uptick in organic sales during the quarter ended on December 28, compared with Bloomberg consensus estimates of 2.27%.
For the year, the number climbed by 2%. Analysts had called for growth of 3.22%.
Still, CEO Ramon Laguarta said in a statement that the company remained "resilient" in 2024 despite "subdued" performance in its key North American operations. A jump in the prices for food and other products has led many consumers to opt for cheaper products and shop less at convenience stores, eating away at a large contributor to PepsiCo’s beverage sales.
Meanwhile, the impact of a product recall at its Quaker Foods North America division last year continued to weigh on the wider business, Laguarta noted. Organic revenue at the segment slid by 2% in the fourth quarter and by 14% for the 2024 financial year.
Disruptions from geopolitical conflicts in some international markets also hit returns, Laguarta added.
However, price increases and cost control measures aimed at improving efficiencies have helped to maintain profits at PepsiCo. Core earnings per share for the fourth quarter came in at $1.96, above Wall Street forecasts of $1.94.
"Our multiyear productivity initiatives will help fund disciplined commercial investments and aid our profitability," Laguarta said. The group guided for organic revenue growth in the "low single-digit" percentage and core constant currency per-share earnings expansion in the "mid single-digit" percentage in 2025.
Shares in PepsiCo dipped by more than 2% in early U.S. trading on Tuesday.