PepsiCo Reports Decline in Revenue and Net Income for 12 Weeks Ended March 22, 2025

PepsiCo, Inc. reported its financial results for the 12 weeks ended March 22, 2025, revealing a decline in both revenue and net income compared to the same period last year. The company generated net revenue of $17.9 billion, a decrease of 2% from $18.25 billion in the prior year. Operating profit also fell by 5% to $2.58 billion, down from $2.72 billion. The net income attributable to PepsiCo was $1.83 billion, reflecting a 10% decline from $2.04 billion in the previous year, resulting in diluted earnings per share of $1.33, down from $1.48.

The decrease in revenue and profitability was attributed to several factors, including a decline in organic volume, unfavorable foreign exchange impacts, and increased commodity costs. Specifically, the company noted a 4-percentage-point negative impact from foreign exchange translation and a 3-percentage-point impact from higher commodity costs. These challenges were partially offset by productivity savings and effective net pricing strategies. The operating margin decreased to 14.4%, down from 14.9% in the prior year.

In terms of strategic developments, PepsiCo made significant acquisitions during the quarter, including the purchase of Siete, a Mexican-American foods business, for $1.2 billion, and an agreement to acquire poppi, a prebiotic soda brand, for $1.95 billion. These acquisitions are expected to enhance PepsiCo's product offerings and market presence. The company also reported restructuring and impairment charges of $213 million, primarily related to its ongoing 2019 Productivity Plan, which aims to streamline operations and reduce costs.

Operationally, PepsiCo's international operations accounted for 37% of consolidated net revenue, with notable contributions from markets such as Mexico, Canada, and China. However, the company faced challenges in certain regions, particularly in Latin America, where net revenue decreased by 12% due to unfavorable foreign exchange rates and organic volume declines. The company reported a total employee headcount of approximately 300,000 as of the end of the reporting period.

Looking ahead, PepsiCo anticipates continued challenges from inflationary pressures, commodity price volatility, and foreign exchange fluctuations. The company remains focused on executing its productivity initiatives and leveraging its acquisitions to drive growth. PepsiCo's management expressed confidence in the company's ability to navigate these challenges while maintaining its commitment to returning value to shareholders through dividends and share repurchases.