PepsiCo Q2 Earnings: What to Expect?

PepsiCo (NASDAQ: PEP) is due to announce its second quarter results on Thursday, and investors are looking for signs of improvement in the US market for major beverages as the private consumption environment softens.

Wall Street predicts that the New York-based company's EPS will be $2.16, and sales will increase 1.3% to 22.6 billion 20 million dollars.

Analysts say food and beverage companies are under pressure again this year due to tight consumer budgets. At the beginning of April, PepsiCo announced that despite strong international sales, it had witnessed a deceleration in both the food and beverage categories in the US.

The company's biggest drop by segment was a 22% decline in Quaker Foods North America.

UBS analyst Peter Grom stated, “Many investors are wait-and-see to see if the top line and bottom line trends will improve, so they don't think the second quarter financial results will be meaningful,” and added that the US trend has not yet shown a meaningful improvement, and there is no upward trend in the full-year outlook at this stage.

Jeffries analysts pointed out that the increase in promotion activities shows that Pepsi is feeling pressured. The securities company estimates that the existing business sales growth rate in 2024 will be +4.6%.

Jefferies analyst Cowmill Gajarawala said, “Pepsi is not unrelated to the slowing down of snacking.”

Mr. Grom said that since the US trend continues to decline compared to the same period last year, the fundamental background is still severe, and the C2Q existing business sales growth rate is probably lower among large multinational companies in the same industry.

Over the past two years, PepsiCo has surpassed EPS forecasts by 100% and has exceeded sales forecasts by 88%.