PepsiCo, Inc. (NASDAQ: PEP) has released its First-Quarter 2025 financial results amid a landscape of heightened geopolitical tensions and fluctuating macroeconomic conditions. The company reported a net revenue decline of 1.8% on a GAAP basis, with organic revenue growing modestly by 1.2%. Earnings per share (EPS) for the quarter stood at $1.33, reflecting a 10% decrease from the prior year and a notable 4% foreign exchange headwind.
Chairman and CEO Ramon Laguarta emphasized the resilient performance of PepsiCo’s businesses despite uncertain global trade developments and heightened supply chain costs projected to persist. Laguarta commented, “We expect more volatility and uncertainty, particularly related to global trade developments, which will increase our supply chain costs. Consumer conditions in many markets remain subdued with an uncertain outlook”. To mitigate these challenges, PepsiCo continues to drive multi-year productivity initiatives aimed at optimizing costs and sustaining disciplined commercial investments to preserve profitability.
Net Revenue: \(17.92 billion, down 1.8% from \)18.25 billion
Organic Revenue Growth: 1.2%, compensating partially for foreign exchange impacts
EPS: \(1.33, down 10% from \)1.48
Core EPS on a constant currency basis declined 4%
Operating Profit Margin was approximately 14.4% for Q1 2025 compared to an FY 2024 margin of 14.01%
PepsiCo Foods North America (PFNA) faced a revenue decline of 1%, primarily driven by volume decreases.
PepsiCo Beverages North America (PBNA) revenues were flat but impacted negatively by a 3% foreign exchange effect.
The International Beverage Franchise (IB Franchise) posted a robust 3% GAAP revenue growth supported by organic revenue increases of up to 7% in certain regions.
Europe, Middle East, Africa (EMEA) showed strength in volume with a 9% increase offset by currency translation headwinds.
PepsiCo’s cash and cash equivalents slightly decreased by \(234 million in Q1 2025 compared to prior year periods, balancing continued capital expenditure of \)603 million and strategic acquisitions amounting to \(1.2 billion during the quarter. The company maintains a strong balance sheet with total assets of \)101.7 billion and total liabilities of $83.2 billion as of March 2025, supporting continued investment and shareholder returns.
Given the prevailing macroeconomic uncertainties and anticipated supply chain cost pressures including tariffs, PepsiCo adjusted its 2025 financial guidance. The company now expects low-single-digit organic revenue growth with core constant currency EPS expected to be approximately flat with 2024 levels, a revision from prior mid-single-digit growth expectations. This outlook incorporates an approximate 3% foreign exchange translation headwind.
Notably, PepsiCo announced its 53rd consecutive annual dividend increase, raising the annualized dividend by 5% starting with the June 2025 payment, underscoring its commitment to shareholder returns.
This adjustment in guidance follows the themes expressed in prior earnings calls, where management highlighted persistent supply chain complexities, inflationary cost pressures, and cautious consumer spending patterns. The company’s strategic focus on productivity improvements and international market expansions remains central to navigating these headwinds.
PepsiCo Q1 2025 8-K Report: SEC Filing
PepsiCo FY 2024 Financial Ratios from Pocket Quant Data
This detailed analysis sheds light on PepsiCo’s financial resilience and strategic adaptations amidst a challenging environment, providing investors with critical insights into its near-term outlook and operational priorities.
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