PepsiCo Q4 2022 Earnings Top Wall Street Estimates Despite Dip in Consumer Demand

UTC by Tolu Ajiboye · 3 min read
PepsiCo Q4 2022 Earnings Top Wall Street Estimates Despite Dip in Consumer Demand
Photo: Unsplash

Beverage giant PepsiCo has posted its Q4 2022 results, revealing a commendable outing amid inflation-triggered product price hikes. 

PepsiCo (NASDAQ: PEP) beat earnings expectations in its recently released Q4 2022 financial results, which benefited from price hikes. The food, snack, and beverage giant currently projects a 6% growth in organic revenue for 2023 following its commendable Q4 outing. In addition, PepsiCo foresees an 8% increase in its 2023 core constant currency earnings per share.

By comparison, Wall Street analysts expect net sales increases of 3.5% and earnings per share of up to 7.3%.

On Thursday, PepsiCo said it raked in revenue of $28 billion for Q4 2022 versus analysts’ expectations of $26.84 billion. Furthermore, the New York-based beverage giant also realized $1.67 adjusted in earnings per share (EPS) compared to the consensus estimate of $1.65.

PepsiCo also reported a Q4 net income haul of $518 million, or 37 cents per share, for 2022. However, this figure paled compared to the lofty $1.32 billion, or 95 cents per share the corporation made a year earlier.

PepsiCo CEO Sees Q4 2022 Performance as Step in Right Direction

Nonetheless, PepsiCo’s Chairman and CEO Ramon Laguarta expressed contentment with the latest quarterly results, saying:

“We are pleased with our results for the fourth quarter and the full year as our business remained resilient and delivered another strong year of growth. Our results demonstrate that the investments we have made in our people, brands, portfolio, value chain, and go-to-market systems are working.”

Laguarta also added that PepsiCo intended to prioritize growth and profitability with a focus on “advantaged capabilities.” As the chief executive of the multinational food, snack, and beverage corporation put it:

“Moving forward, we will continue to focus on driving growth and winning in the marketplace while developing advantaged capabilities to fortify our businesses for the longterm. This includes embedding pep+ at the center of our business in how we innovate, operate, run our teams, and build our brands.”

According to Laguarta, the leading beverage corporation plans a 10% increase in annualized dividends, beginning with the June 2023 payment. This earmarked payment date also represents PepsiCo’s 51st consecutive annual increase. Furthermore, the company seeks to buy back approximately $1.0 billion worth of its PEP shares.

PepsiCo’s net sales grew 10.9% to $28 billion in the final quarter of last year, with organic revenue also rising 14.6%. It should be noted that this organic revenue does not include the impact of acquisitions and divestitures embarked on during the period.

However, PepsiCo experienced a 2% volume decline across its global food business due to price hikes which impacted consumer demand. Although the company’s inflation-induced price hike strategy spurred snack and drink sales, fewer consumers yearned for such products during Q4.

Snacking Portfolio

PepsiCo recently revealed an insightful strategy for growing its impressive $21 billion snacking portfolio by adding more flavors. Furthermore, the food and beverage corporation is also exploring packaging formats and a unique combination of ingredients to strengthen its industrial position.

Some of PepsiCo’s popular snack brands include Lay’s potato chips, Doritos tortilla chips, and Cheetos crunchy corn puffs.

Middle Eastern Headquarters Relocation

In other developing PepsiCo news, the company is in the process of relocating its senior leadership team from Dubai to Saudi Arabia. According to a PepsiCo high-ranking official, this development is part of broader plans to relocate its Middle Eastern-based headquarters.

Business News, Market News, News, Stocks, Wall Street
Related Articles