PepsiCo lowered its full-year earnings expectations Thursday, citing increased costs from tariffs and a pullback in consumer spending.
The maker of Pepsi beverages and Frito-Lay snacks said it now expects its core earnings per share to be even with last year. Previously it expected mid-single-digit percentage growth.
A 25% tariff on imported aluminum is among those hitting PepsiCo and other beverage makers.
PepsiCo said in February that years of double-digit price increases and changing consumer tastes had weakened demand for its snacks and drinks.
The company responded by investing more heavily in value brands, like Chester’s and Santitas, and adding more promotions and value packs. It also burnished its health credentials last month by purchasing Poppi, a popular prebiotic soda brand, for $1.95 billion.
PepsiCo said it expects “elevated levels of volatility and uncertainty” for the rest of this year. Geopolitical tensions are impacting sales in some markets, the company said.
PepsiCo’s net revenue fell 1.8% to $17.9 billion in the first quarter as its sales volumes dropped around the world. That was slightly higher than the $17.8 billion Wall Street was expecting, according to analysts polled by FactSet.
The Purchase, New York, company’s net income fell 10% to $1.8 billion. Adjusted for one-time items, PepsiCo earned $1.48 per share. That was slightly lower than the $1.49 analysts forecast.
Shares of PepsiCo slipped 1% before the opening bell Thursday.
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