PepsiCo lowered its organic sales guidance for the year after U.S. consumers continued to pull back on snack and beverage purchases.
The company, based in Purchase, New York, said Tuesday that it now expects its organic revenue – which is adjusted for currency exchange rates and the impact of product purchases or divestitures – to rise in the low single digits range this year. An increase of 4% was expected.
PepsiCo said its performance in North America was “moderate,” hurt by a major recall of its Quaker Oats granola bars and breakfast cereals, as well as weak demand for its Frito-Lay snacks and drinks. Frito-Lay North America sales volumes fell 1.5%, while North American beverage volumes fell 3%.
Consumers began pushing back on higher prices this summer after years of price increases, and PepsiCo pledged to lower the cost of some products such as potato chips and tortilla chips.
Third quarter revenue was flat at $23.3 billion. Wall Street had expected revenue of $23.8 billion, according to analysts polled by FactSet.
Net income fell 5% to $2.9 billion, or $2.13 per share. That was also less than analyst forecasts of $2.28.
PepsiCo shares fell 1% in premarket trading.
