International markets underpin strong quarter for PepsiCo
By Josh White
Date: Thursday 17 Jul 2025
(Sharecast News) - PepsiCo reported stronger-than-expected second-quarter earnings on Thursday, with robust international sales and resilient soda demand helping offset weaker performance in North America.
The food and beverage behemoth reaffirmed its full-year guidance and slightly raised its core earnings forecast as currency headwinds eased.
Revenue for the quarter rose 1% to $22.73bn, beating Wall Street estimates of $22.28bn, according to LSEG data.
On an organic basis, which excludes the impact of foreign exchange and acquisitions, revenue grew 2.1%.
Core earnings per share came in at $2.12, ahead of the $2.03 analysts had forecast.
However, GAAP earnings per share fell 59% year-on-year to 92 cents, reflecting impairment charges related to the company's Rockstar and Be & Cheery brands.
CEO Ramon Laguarta said the company was "encouraged by the acceleration in our net revenue growth versus the previous quarter," attributing the improvement to strong international momentum and better execution in North America.
"Our businesses effectively navigated through a challenging environment," he added in a statement.
International operations, which account for about 40% of total revenue, continued to be a bright spot.
Organic revenue rose 7% in the Europe, Middle East and Africa (EMEA) region and 7% in Latin America.
In contrast, North America saw mixed results, with snack sales falling 1% and beverage sales down 2%.
PepsiCo said it had responded by expanding its lower-priced snack offerings, including Chester's and Santitas, and introducing new product innovations.
Despite lingering cost pressures, including those tied to president Donald Trump's tariff hike on imported aluminum from 25% to 50% in June, the company said it now expected full-year core earnings per share to decline by 1.5%, an improvement from the previously-forecast 3% drop.
The revised outlook reflected a moderation in foreign exchange headwinds due to a weakening dollar.
Core earnings on a constant currency basis were still expected to be flat versus 2024.
Citi and UBS both reiterated 'buy' ratings on the stock, with Citi calling the results "better than expected" and highlighting strong margins and international performance.
The company reaffirmed its 2025 financial guidance for low-single-digit organic revenue growth and total shareholder returns of $8.6bn, including $7.6bn in dividends and $1bn in share buybacks.
Looking ahead, Laguarta said PepsiCo would "accelerate initiatives to improve our North America business performance," including cost optimization and portfolio innovation.
"We continue to expect incremental supply chain costs," he added, "and are implementing mitigation strategies to partially reduce these impacts."
At 0948 EDT (1448 BST), shares in PepsiCo were up 5.85% in New York, at $143.26.
Reporting by Josh White for Sharecast.com.
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