PepsiCo posts strong Q2 revenue despite profit dip from brand impairments
PepsiCo beats revenue expectations in Q2, driven by international growth, despite sharp decline in net income.
USA – PepsiCo has reported stronger-than-expected revenue for its fiscal second quarter ending June 14, reflecting continued international momentum and improved product innovation, despite a sharp drop in profits driven by brand impairment charges.
The global food and beverage company recorded quarterly revenue of US$22.73 billion, marking a 1% year-on-year increase. The figure exceeded analysts’ expectations of US$22.27 billion and reversed a 1.8% decline reported in the previous quarter.
Organic revenue rose by 2.1%, led by 6% growth in international operations, while North American revenue remained flat.
Net income for the quarter fell to US$1.26 billion, down significantly from US$3.08 billion a year earlier. The earnings decline was largely attributed to a US$1.86 billion impairment charge linked to the company’s Rockstar energy drink brand and Be & Cheery, a snack brand in China.
PepsiCo CEO Ramon Laguarta said the company was encouraged by the acceleration in net revenue growth compared to the first quarter, adding that its businesses continue to navigate challenging market conditions effectively.
In its global beverage operations, PepsiCo reported mixed results. While international markets delivered overall gains, the International Beverages Franchise segment noted a decline in India.
Nevertheless, PepsiCo said it had gained market share in key countries such as China, India, Mexico, Brazil, and the United Kingdom.
The company’s international convenient foods division saw 4% organic revenue growth during the quarter, an improvement over the prior quarter. Strong performances were noted in markets including Mexico, Brazil, Colombia, India, Egypt, Türkiye, Saudi Arabia, and Thailand.
In the Asia Pacific foods division, which encompasses markets like China, India, Australia, and New Zealand, net revenue increased by 0.5%, driven by organic volume growth.
Looking ahead, PepsiCo reaffirmed its full-year forecast for low-single-digit organic revenue growth and flat core constant currency earnings per share.
The company also revised its foreign exchange headwind estimate from 3 percentage points to 1.5 points.
PepsiCo plans to accelerate innovation and cost optimization initiatives to support profitability, particularly in North America, while maintaining focus on international expansion.
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