PepsiCo reported disappointing Q2 2024 revenue growth of 1.9%, missing the 2.9% forecast. 

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Persistent inflation led budget-conscious shoppers to cut back on snack and drink purchases, causing a 2% drop in food volume sales.

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Additionally, Quaker Foods experienced a 17% year-over-year decline due to significant recalls.

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Internationally, PepsiCo fared better with organic sales up across the board, which excludes the impact of acquisitions. Organic revenue in Latin America and Asia Pacific grew 2% and 1%, respectively, but fell short of analyst estimates as food volumes shrank.

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India was described by Laguarta as a “big growth space,” and even in China, where consumers are saving more than spending, he sees opportunity for the company’s relatively inexpensive products.

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To bring back consumers, PepsiCo will focus “surgically” on promotions while increasing certain advertising and marketing initiatives, Laguarta said in a statement. The company said it expects that consumers will remain budget conscious and overall category growth will moderate. It also plans to improve productivity with more digitalization and simplification of the company, Laguarta told analysts.

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