PepsiCo reports $91.85bn revenue in 2024, but expects modest growth in 2025

Overview

PepsiCo reported its fourth-quarter and full-year 2024 results, highlighting steady growth despite challenges in North America and geopolitical tensions in international markets.

Chairman and CEO Ramon Laguarta emphasized the company’s resilience, stating: “Our businesses remained resilient in 2024, despite subdued category performance trends in North America, the continued impacts related to a recall in our Quaker Foods North America division and business disruptions due to geopolitical tensions in certain international markets. Our enhanced multiyear productivity initiatives enabled us to invest in our businesses, and deliver improvements in our gross margin, operating margin expansion and EPS in 2024.”

Q4 2024 vs. Q4 2023:

Net revenue declined to $27.78bn (-0.2% YoY), impacted by foreign exchange headwinds.
GAAP EPS increased to a value of $1.11 (+17% vs. 2023), despite a 4% negative impact from foreign exchange fluctuations, while core EPS (Non-GAAP) grew to $1.96 (+14% vs. 2023), driven by productivity savings and cost efficiency.
Organic revenue growth reached 2.1%, reflecting price adjustments and improvements in product mix.
For Frito-Lay North America, operating profit decreased 11%, primarily reflecting certain operating cost increases, including strategic initiatives.
For Quaker Foods North America, operating profit increased 323%, primarily reflecting the favorable impact of prior-year charges associated with a previously announced voluntary recall of certain bars and cereals.
For PepsiCo Beverages North America, operating profit decreased 127%, recording an operating loss of $109m, primarily due to impairment charges related to Tropicana and Naked juice brands.
For Latin America, revenue grew 4% organically, though foreign exchange translation and tax reserves negatively impacted GAAP results, while operating profit fell 25%, reflecting higher indirect tax reserves.
For Europe, operating profit improvement primarily reflects a favorable impact of prior-year impairment charges of $862m related to the SodaStream business, net revenue growth and productivity savings.
For Africa, Middle East & South Asia (AMESA), operating profit rose 38%, supported by pricing actions and productivity savings.
For Asia Pacific, Australia and China Region, operating profit jumped 284%, benefiting from favorable impairment comparisons and cost efficiencies.

Full-Year 2024 highlights:

Net revenue increased to a value of $91.85bn (+0.4% YoY), benefiting from steady international performance.
Net income grew slightly, to a value of $9.58bn (+6% YoY).
GAAP EPS rose to $6.95 (+6% vs. 2023), overcoming cost pressures and foreign exchange headwinds, while core EPS (Non-GAAP) improved to $8.16 (+9% vs. 2023), supported by disciplined pricing strategies and cost controls.
Organic revenue growth stood at 2.0%, demonstrating resilient demand despite a challenging market environment.
For Frito-Lay North America, operating profit decreased 7%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in organic volume.
For Quaker Foods North America, operating profit decreased 38%, primarily reflecting the decrease in organic volume and certain operating cost increases.
For PepsiCo Beverages North America, operating profit decreased 11%, primarily driven by certain operating cost increases and the decline in organic volume.
For Latin America, operating profit decreased slightly, primarily reflecting certain operating cost increases, the net organic volume decline and higher advertising and marketing expenses.
For Europe, operating profit increased 163%, primarily reflecting a 148pp favorable impact of the prior-year impairment charges related to the SodaStream business, the net revenue growth and productivity savings.
For Africa, Middle East & South Asia (AMESA), operating profit decreased 1%, primarily reflecting certain operating cost increases and a 33pp impact of higher commodity costs.
For Asia Pacific, Australia and China Region, operating profit increased 14%, primarily reflecting productivity savings and the organic volume growth.

PepsiCo anticipates modest growth in 2025, striking a balance between expansion and cost discipline. The company expects organic revenue growth in the low-single digits, driven by disciplined pricing strategies and effective cost management. Core constant currency EPS is projected to grow in the mid-single digits, reflecting profitability initiatives and operational efficiencies. Additionally, PepsiCo plans to return $8.6bn to shareholders, including a 5% increase in its annual dividend, reinforcing its commitment to long-term value creation. However, foreign exchange headwinds are expected to impact reported revenue and EPS by approximately 3%, presenting a challenge in the year ahead.

The company’s management’s skepticism about the 2025 results didn’t bring good feelings on Wall Street, as after the announcement of the report, the PEP share price steadily decreased, reaching $145 at the end of this trading week.