PepsiCo Reports Revenue Growth but Significant Decline in Net Income Amid Impairment Charges

PepsiCo, Inc. reported its financial results for the 12 and 24 weeks ended June 14, 2025, revealing a decline in both revenue and profitability compared to the previous fiscal period. For the 12 weeks, net revenue reached $22.726 billion, a 1% increase from $22.501 billion in the same period last year. However, net income attributable to PepsiCo fell significantly by 59% to $1.263 billion, or $0.92 per diluted share, down from $3.083 billion, or $2.23 per diluted share, in the prior year. The 24-week figures showed a slight decrease in revenue to $40.645 billion from $40.751 billion, while net income also dropped by 40% to $3.097 billion.

The decline in profitability was primarily attributed to substantial impairment charges totaling $1.860 billion related to the Rockstar and Be & Cheery brands, alongside increased operating costs and a decline in organic volume. The operating profit for the 12 weeks was $1.789 billion, down 56% from $4.048 billion, while the operating margin decreased from 18% to 7.9%. For the 24 weeks, operating profit decreased by 35% to $4.372 billion, with the operating margin declining from 16.6% to 10.8%.

Strategically, PepsiCo made significant acquisitions during the reporting period, including the purchase of Siete, a Mexican-American foods business, for $1.2 billion, and poppi, a prebiotic soda company, for $1.95 billion. These acquisitions are expected to enhance PepsiCo's product offerings and market presence. The company also reported a restructuring plan aimed at optimizing operations, which is expected to incur pre-tax charges of approximately $6.15 billion through 2030.

Operationally, PepsiCo's international operations accounted for 41% of consolidated net revenue, with notable growth in regions such as the Middle East and Asia. However, unfavorable foreign exchange rates negatively impacted revenue performance, particularly in Latin America and the EMEA region. The company reported a decline in unit volume across several segments, particularly in North America, where beverage volumes fell by 2%. Despite these challenges, PepsiCo continues to focus on productivity savings and effective pricing strategies to mitigate the impact of rising commodity costs.

Looking ahead, PepsiCo anticipates ongoing challenges due to market conditions, including inflationary pressures and geopolitical uncertainties. The company remains committed to its productivity initiatives and strategic acquisitions to drive future growth. PepsiCo's management expressed confidence in the company's ability to navigate these challenges while maintaining its focus on delivering value to shareholders through dividends and share repurchases.