PepsiCo price hikes lead to strong third-quarter earnings

Published

2 years ago

October 12, 2023

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Price hikes lifted PepsiCo’s profits in the third quarter, but the company says those increases are likely to moderate in the coming year.

Pepsi raised prices 11% in the July-September period, the seventh straight quarter that the Purchase, New York, company has increased prices by double-digits.

The higher prices took a toll on demand, with sales volumes down 2.5%.

PepsiCo said some of that volume decline is strategic.

The company said it has been shrinking package sizes to meet consumer demand for convenience and portion control.

Units are growing much faster than volume, PepsiCo Chairman and CEO Ramon Laguarta said Tuesday in a conference call with investors.

But there is also some consumer pushback on prices. Consumers are looking for value and, in some cases, are trading down to cheaper stores.

I do think that we see the consumer right now being more selective, PepsiCo’s Chief Financial Officer Hugh Johnston said Tuesday on a conference call with investors.

Still, Johnston said convenience store sales and food service sales, which usually weaken in times of high consumer stress, are strong.

Johnston said Pepsi continues to see higher prices for commodities like grain and cooking oil.

In 2024, Pepsi expects inflation to be slightly higher than the 2% to 3% it was accustomed to before the pandemic.

Consumers should expect to see price increases roughly in line with inflation, he said.

Pepsi is watching the growing use of weight loss drugs like Ozempic, but so far their impact on the business has been negligible, Laguarta said.

They could be outweighed by other trends, including rising incomes in many countries and the growing popularity of snacking in place of meals.

Were seeing a lot of tailwinds that will continue to drive our categories, he said.

Pepsi shares were up 1.5% in morning trading.

In the third quarter, Frito-Lay North America sales volumes dropped 0.5% during the July-September period as net prices rose 8%.

North American beverage sales volumes dropped 6% as prices rose 12%.

Sales volumes in Europe were flat. Sales volumes in Latin America dropped 5%.

Net pricing includes price hikes as well as changes in the mix of products sold and smaller package sizes.

In prepared remarks Tuesday, PepsiCo said consumers are gravitating toward smaller packages for convenience and portion control.

Net revenue was $23.4 billion, the company said Tuesday. That was in line with Wall Streets expectations, according to analysts polled by FactSet.

Net income for Pepsi rose 14% to $3.1 billion, or $2.24 per share.

That beat the $2.15 per share that analysts had forecast.

Pepsi now expects its full-year earnings per share to increase 13%, up from previous projections of 12%, due to the strength of its sales and cost-cutting efforts.

World

Putin has agreed Ukraine can have ‘NATO-style’ security guarantee, Trump envoy says

Published

1 hour ago

August 17, 2025

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Putin has agreed Ukraine can have 'NATO-style' security guarantee, Trump envoy says

Vladimir Putin has agreed to allow Ukraine’s allies to offer it a NATO-like security guarantee as part of an eventual deal to end the war, according to US special envoy Steve Witkoff.

Mr Witkoff said the Russian president agreed to the move when he met with Donald Trump in Alaska on Friday.

Speaking to CNN on Sunday, Mr Witkoff, who was by the US president’s side at the summit, said: “We were able to win the following concession: That the United States could offer Article 5-like protection, which is one of the real reasons why Ukraine wants to be in NATO.”

Article 5 is a core principle of the 32-member collective, which states that an armed attack against one or more of its members shall be considered an attack against all. It has only been invoked once, by the US, in the wake of the 9/11 attacks in 2001.

Russia has repeatedly insisted that Ukraine cannot be allowed to join NATO and has dismissed the idea that NATO member forces could be peacekeepers under some sort of ceasefire deal.

Mr Witkoff, who has previously met with Mr Putin to discuss an end to the Ukraine war, said Friday’s summit was the first time he had heard the Russian president agree to the suggestion of NATO-like protection – and called it “game-changing”.

His comments came as Volodymyr Zelenskyy met with European Commission President Ursula von der Leyen in Brussels.

The Ukrainian president said in a post on X: “This is a historic decision that the United States is ready to take part in security guarantees for Ukraine.

“Security guarantees, as a result of our joint work, must really be very practical, delivering protection on land, in the air, and at sea, and must be developed with Europe’s participation.”

Ms von der Leyen, speaking at a news conference with the Ukrainian president, said the European Union “is ready to do its share”.

EU leaders to join Zelenskyy at White House

Sunday afternoon also saw Ms von der Leyen and Mr Zelenskyy dial in to a meeting with the coalition of the willing, a peacekeeping alliance of European leaders – some of whom will accompany Mr Zelenskyy to meet with Mr Trump tomorrow.

Ms von der Leyen will be at the crunch talks in Washington DC, as will Sir Keir Starmer, France’s Emmanuel Macron and Italy’s Giorgia Meloni.

Germany’s Chancellor Friedrich Merz and NATO Secretary General Mark Rutte will also be in attendance, after the US president reportedly extended an invitation to European leaders.

Mr Putin has reportedly made demands to take control of the eastern Donetsk and Luhansk regions of Ukraine during his summit with Mr Trump as a condition for ending the war.

In exchange, Russia would give up other Ukrainian territories held by its troops, according to several news reports citing sources close to the matter.

Russian troops currently occupy large parts of the two regions and, in September 2022, Moscow announced it was officially annexing them, alongside the Kherson and Zaporizhia regions, in a move rejected and condemned as illegal by the West.

Mr Trump is said to be planning to urge Mr Zelenskyy to agree to the conditions as part of a peace deal to end the war.

That’s despite the Ukrainian president previously ruling out formally handing any territory to Moscow, which he says would be impossible under the country’s constitution, and would deprive Ukraine of defensive lines and open the way for Moscow to conduct further offensives.

In coordinated statements following the Alaska summit, European leaders said Mr Zelenskyy must play a greater role in future talks, and that peace cannot be achieved without him.

The US president said the Washington talk with Mr Zelenskyy could potentially pave the way for a three-way meeting with Mr Putin.

On Saturday, Downing Street insisted Sir Keir and other allies stand ready to support the next phase of talks to end the war.

“At the meeting that will take place at the White House tomorrow, the Prime Minister, with other European partners, stands ready to support this next phase of further talks and will reaffirm that his backing for Ukraine will continue as long as it takes,” a statement from No 10 said.

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