PepsiCo Faces Financial Hurdles Amid Global Tariffs

PepsiCo lowered its annual earnings expectations due to rising tariffs and reduced consumer spending. The company reports a 1.8% revenue drop and a 10% decline in net income. With aluminum tariffs impacting costs, PepsiCo anticipates flat core earnings per share, adjusting prior growth forecasts.

On Thursday, PepsiCo announced a downward revision of its full-year earnings forecast, attributing the decline to heightened costs from tariffs and reduced consumer spending. The beverage giant, known for its Pepsi drinks and Frito-Lay snacks, now anticipates its core earnings per share to remain steady with last year's figures, a notable change from its previous mid-single-digit growth expectation.

The company faces significant financial pressures, including a 25% tariff on imported aluminum, which has been affecting PepsiCo and other beverage manufacturers. This has contributed to a 1.8% drop in net revenue, bringing it to USD 17.9 billion for the first quarter, slightly above the USD 17.8 billion that analysts had predicted, according to FactSet.

The Purchase, New York-based company also reported a 10% fall in net income, totaling USD 1.8 billion. Adjusted for one-time items, PepsiCo's earnings per share reached USD 1.48, narrowly missing the USD 1.49 forecast by analysts.

(With inputs from agencies.)