PepsiCo(US:PEP)2025-04-23 22:13Financial Performance - Net revenue for Q1 2025 decreased by 1.8% to $17.919 billion, compared to $18.250 billion in Q1 2024[2][16] - Earnings per share (EPS) reported at $1.33, reflecting a 10% decline from the previous year[2][16] - Organic revenue growth for Q1 2025 was 1.2%, with core EPS at $1.48, down 4% in constant currency[4][12] - Operating profit for Q1 2025 was $2.583 billion, down from $2.717 billion in Q1 2024[16] - The company reported a net income attributable to PepsiCo of $1.834 billion, compared to $2.042 billion in the same quarter last year[16] - Reported net income attributable to PepsiCo for the 12 weeks ended March 22, 2025, was $1.834 billion, with diluted EPS of $1.33 and an effective tax rate of 21.3%[55] - Core, non-GAAP net income for the same period was $2.031 billion, resulting in a diluted EPS of $1.48 and an effective tax rate of 20.4%[55] - Reported Net Revenue for the full year 2024 was $91.854 billion, a decrease of 2% compared to the prior year[103] Revenue Guidance - The company expects low-single-digit organic revenue growth for 2025, with core constant currency EPS projected to be approximately even with the prior year[6][11] - A foreign exchange translation headwind of approximately 3 percentage points is anticipated to negatively impact reported net revenue and core EPS growth[12] - The core constant currency EPS growth guidance for 2025 is projected to exclude the impact of foreign exchange translation, with specific figures not disclosed due to unpredictability[39] Shareholder Returns - Total cash returns to shareholders are expected to be approximately $8.6 billion, including $7.6 billion in dividends and $1.0 billion in share repurchases[14] - The company plans to increase its annualized dividend per share by 5% starting with the June 2025 payment, marking the 53rd consecutive annual increase[6] Asset and Liability Management - Total assets increased to $101.737 billion as of March 22, 2025, up from $99.467 billion on December 28, 2024, representing a growth of 2.55%[22] - Total current liabilities remained stable at $31.511 billion, compared to $31.536 billion in the previous period[22] - Long-term debt obligations rose to $39.419 billion, an increase from $37.224 billion, indicating a 5.9% increase in leverage[22] - The company’s retained earnings were reported at $72.238 billion, slightly down from $72.266 billion, indicating a decrease of 0.04%[22] Cost Management - Reported Gross Profit for the quarter was $9,993 million, with a Gross Margin of 55.8%[47] - Core Gross Profit, a non-GAAP measure, was $9,983 million, reflecting a Gross Margin of 55.7%[47] - Reported Operating Profit was $2,583 million, representing an Operating Margin of 14.4%[47] - Core Operating Profit, non-GAAP measure, reached $2,789 million, with an Operating Margin of 15.6%[47] - The total Reported Cost of Sales was $7,926 million, while the Core Cost of Sales was $7,936 million[47] - Selling, General and Administrative Expenses on a GAAP basis totaled $7,410 million, with Core Expenses at $7,194 million[47] Operational Challenges - PepsiCo is actively planning mitigation actions to address higher supply chain costs while focusing on long-term international business expansion[5][6] - The company experienced a product recall-related impact of $167 million, affecting both Gross and Operating Profit[51] - The company incurred restructuring and impairment charges of $133 million, which included various adjustments across different segments[109] - The impact of product recalls was recorded at $176 million, emphasizing the need for stringent quality control measures[109] Market Trends and Future Outlook - Future guidance indicates a focus on growth in emerging markets, with an emphasis on expanding product offerings and enhancing brand presence[112] - The company aims to leverage new technologies and product innovations to drive market expansion and improve competitive positioning[112] - Risks identified include potential supply chain disruptions and changes in consumer demand, which could affect future performance[112]