Pepsi reiterated its 2024 financial guidance, including 4% organic sales growth. The company has said it expects a return to more normal growth rates this 12 months after several years of inflation-related price increases.
Sales growth is slowing
That could have disillusioned investors accustomed to stronger growth at PepsiCo. Last 12 months, for instance, organic sales grew by 9.5%. Shares of PepsiCo fell greater than 2.5% in morning trading on Tuesday. In North America, Frito-Lay sales rose 2%, while Pepsi beverage sales rose 1%. Sales were impacted by a recall of Quaker Oats cereal, bars and snacks earlier within the quarter resulting from possible salmonella contamination. Quaker Foods’ sales fell 24% within the quarter. But the corporate reported 11% sales growth in Asia Pacific and 10% sales growth in Europe.
Consumer demand, employment remain strong
Ramon Laguarta, chairman and CEO of PepsiCo, said the corporate is optimistic that consumer demand will proceed to grow this 12 months within the U.S. and elsewhere.
“We believe the global consumer is very resilient,” Laguarta said said during a conference call with investors. “This is essentially supported by two facts: very low or fairly low unemployment worldwide and good wage growth in most of the countries where we participate.” In Europe, sales were driven by demand in Eastern Europe, Laguarta said.
In Western Europe, consumers saw fewer PepsiCo snacks and drinks on grocery shelves through the quarter. Carrefour, considered one of Europe’s largest supermarket chains, said in January it was withdrawing PepsiCo products from stores in France, Belgium, Spain and Italy resulting from unacceptable price increases. The two corporations settled their pricing dispute and Carrefour began restocking PepsiCo products in early April. The company said it also saw double-digit organic sales growth in Mexico, Brazil, Egypt, Pakistan, China and Australia.
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