PepsiCo, headquartered in Purchase, New York, exceeded expectations with its second-quarter earnings despite a decrease in customer demand for its snacks and beverages. The company reported a 12% increase in net income to $3 billion, or $2.28 per share, for the period spanning April to June. Analysts had anticipated earnings of $2.16 per share, marking a positive outcome for PepsiCo.
The company’s revenue saw a modest growth of less than 1% to reach $22.5 billion, slightly below the $22.59 billion expected by analysts. Over the past two years, PepsiCo has implemented significant price increases in response to escalating costs of ingredients and packaging. The company reported its eighth consecutive quarter of double-digit percentage price increases in the fourth quarter of 2023, with prices rising by 5% in the first quarter and 3% in the most recent quarter.
Despite the successful financial results, the higher prices have impacted customer demand negatively. PepsiCo has observed a decline in global sales volumes for the past eight quarters. The company attributed some of this decrease to a strategic effort to reduce package sizes; however, it also pointed out that lower-income U.S. customers have been purchasing fewer snacks or switching to store brands.
