PepsiCo Revenue Chart Q4 2023
In the latest financial report, PepsiCo demonstrated robust fourth-quarter profits, surging to $1.3 billion or 94 cents per share, signaling resilience despite challenges. While lower charges and continued price hikes contributed to this success, sales faced headwinds due to heightened consumer resistance linked to increased prices.
Despite the positive profit trend, there was a 2% drop in shares, despite the company's announcement of a 7% annual dividend increase and a substantial $1 billion share buyback. Projections for organic revenue growth in the upcoming year are more conservative at 4%, compared to the notable 9.5% growth in 2023.
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PepsiCo struggle with managing higher prices became evident, prompting global retailer Carrefour to stop selling PepsiCo products in specific regions due to perceived excessive price increases.
During Q4 2023, PepsiCo revenue slipped to $27.86 billion, missing Wall Street estimates of $28.24 billion. With a 9% increase in average prices, the company experienced a 4% decline in organic volume, reflecting the delicate balance of sustaining consumer demand amid inflationary pressures.
CEO Ramon Laguarta acknowledged the normalization of category growth rates and the reversion of consumer behaviors to pre-pandemic norms. The company anticipates a more moderate organic revenue growth of at least 4% in 2024, compared to the 9.5% reported in 2023.
Earnings per share exceeded expectations at $1.78, while revenue fell short at $27.85 billion, marking the first quarterly revenue decline since 2020. Factors such as high borrowing costs, reduced personal savings, and consumer preferences for smaller pack sizes contributed to this decline.
In the North American division, varied results were observed, with the Quaker Foods unit reporting an 8% volume decline and Frito-Lay North America experiencing a 2% drop. The beverage unit faced challenges, with a 6% decline in volume.
Looking ahead to 2024, PepsiCo anticipates a potentially challenging first half, considering product recalls impacting the North American Quaker Oats business and international conflicts affecting sales. Despite these challenges, the company aims for organic revenue growth of at least 4% and core constant currency earnings per share growth of at least 8%.
In summary, PepsiCo Q4 2023 results reflect a dynamic landscape of increased profits, declining sales, and challenges associated with higher prices. The company aims to navigate these complexities in the coming year, anticipating a cautious consumer approach and leveraging international growth opportunities.
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