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Jun 15, 2024
PepsiCo Q2 2024 Earnings Report
PepsiCo reported mixed Q2 2024 results, with net revenue growth offset by challenges in North America convenient foods and product recalls, but maintained strong margin expansion and double-digit EPS growth.
Key Takeaways
PepsiCo's Q2 2024 results showed net revenue growth despite difficult comparisons and subdued category performance. The company is focusing on productivity initiatives and commercial investments to stimulate growth, leading to a revised organic revenue growth outlook of approximately 4% and a reaffirmed core constant currency EPS growth of at least 8% for the full year.
PepsiCo delivered net revenue growth, strong gross and operating margin expansion, and double-digit EPS growth in Q2 2024.
The company faced challenges including difficult net revenue growth comparisons, subdued category performance in North America convenient foods, and impacts from product recalls at Quaker Foods North America.
PepsiCo is elevating productivity initiatives and making commercial investments to stimulate growth, focusing on optimal value propositions, advertising, and go-to-market distribution.
The company now expects approximately 4% organic revenue growth and reaffirms at least 8% core constant currency EPS growth for full-year 2024.
Revenue by Segment
Forward Guidance
PepsiCo expects approximately 4 percent organic revenue growth and at least 8 percent increase in core constant currency EPS for 2024. The company anticipates a core annual effective tax rate of 20 percent and plans total cash returns to shareholders of approximately $8.2 billion.
Positive Outlook
- Approximately 4 percent organic revenue growth.
- At least 8 percent increase in core constant currency EPS.
- A core annual effective tax rate of 20 percent.
- Total cash returns to shareholders of approximately $8.2 billion, comprised of dividends of $7.2 billion and share repurchases of $1.0 billion.
- Core EPS of at least $8.15, a 7 percent increase compared to 2023 core EPS of $7.62.
Challenges Ahead
- An approximate 1-percentage-point foreign exchange translation headwind to impact reported net revenue.
- An approximate 1-percentage-point foreign exchange translation headwind to impact core EPS growth.
- Unpredictability of future changes in foreign exchange rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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