PepsiCo Delivers The Fizz In Q2, Sweetens Outlook On Subdued Dollar Headwind

PepsiCo, Inc. (NASDAQ:PEP) shares are trading higher in the premarket session on Thursday, after the food and beverage giant reported second-quarter results.

The company registered second-quarter adjusted earnings per share of $2.12, beating the analyst consensus estimate of $2.03.

Quarterly sales of $22.726 billion (+1% year over year) outpaced the Street view of $22.292 billion.

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“Our international business momentum continued, while our North America businesses improved their execution and competitiveness in key subcategories and channels,” said Chairman and CEO Ramon Laguarta.

Net revenue from PepsiCo Foods North America (PFNA) increased by 1% year over year, PepsiCo Beverages North America (PBNA) remained flat, and International Beverages Franchise (IB Franchise) gained 3%.

Latin America Foods (LatAm Foods) sales slumped 7% year over year, and Europe, Middle East and Africa (EMEA) and Asia Pacific sales rose 8%.

Quarterly gross profit increased 1.27% year over year to $12.422 million, while operating profit declined 55.8%.

“We will continue to build upon the successful expansion and growth of our International business and accelerate initiatives to improve our North America business performance,” Laguarta added. “These initiatives include more portfolio innovation and cost optimization activities that aim to stimulate growth and profitability.”

Adjusted gross margin in the quarter under review contracted to 55.1% from 55.9% in the year-ago period. Adjusted operating margin in the second quarter contracted to 17.2% from 18.3% in the year-ago period.

PepsiCo exited the quarter with cash and equivalents worth $7.631 billion, compared with $8.505 billion at the end of December 2024.

The company’s long-term debt obligations expanded to $39.328 billion, compared with $37.224 billion at the end of December 2024.

Outlook

PepsiCo has raised its full-year 2025 adjusted earnings per share (EPS) guidance from $7.92 to $8.04, exceeding the Street estimate of $7.88.

PepsiCo now expects a foreign exchange translation headwind of approximately 1.5% to negatively impact its reported net revenue and core EPS growth. This is an improvement from its earlier forecast of an approximate 3% headwind.

“For fiscal 2025, we remain confident in our ability to deliver low-single-digit organic revenue growth with core constant currency EPS to be approximately even with the prior year,” the CEO said.

Price Action: PEP shares are trading higher by 2.25% to $138.40 premarket at last check Thursday.

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