Pepsico trims 2024 sales forecast, reports double-digit growth in India; stock up 1.29%

The soft drink Pepsi's parent company, Pepsico Inc., announced double-digit organic sales growth for the Indian market in the third quarter of the calendar year 2024, reported the news agency PTI on Tuesday, October 8.

“There are pockets of strength in International, Southeast Asia and India markets that are growing nicely,” said Ramon Laguarta, Chairman and Chief Executive Officer (CEO) of Pepsico, according to the agency report.

Pepsico also reported high-single-digit growth in its beverage and convenience food unit volumes in the Indian market, as per the report.

“For the third quarter, developing and emerging markets such as India, Egypt, Turkey, Poland, and Vietnam each delivered double-digit organic revenue growth,” reported the agency, quoting the earnings statement of Pepsico.

Pepsico's shares surged 1.22 per cent in Tuesday's market on the Nasdaq Composite at $169.18 as of 1:57 a.m. EDT.

Sales outlook of Pepsico

The company reduced its 2024 sales forecast as consumers in the U.S., China, and other markets continued to reduce their purchases of the company's snacks and drinks, reported the news agency AP on Tuesday, October 8.

Pepsico's North American sales were “subdued,” as the organic revenue rose 1.9 per cent in the first three quarters of this year. According to the agency report, North American beverage sales volumes fell by 3 per cent in the quarter.

According to a Reuters report quoting CEO Laguarta, the combined impacts of inflationary pressures and higher borrowing costs over the last few years have continued to impact consumer budgets and spending patterns.

The rising food prices and other products have forced consumers to curb their spending habits, choosing smaller packages and portions and shopping less at convenience stores, which make up for a greater portion of PepsiCo's beverage sales, as per the report.

The company is eyeing strong growth in markets like India and Brazil, whereas customer spending in China, Mexico, and some parts of Europe is slowing down. According to the news agency, PepsiCo has raised its prices by 3 per cent globally, and sales volumes fell 2 per cent.

Pepsico's third-quarter revenues were flat at $23.3 billion, and net profits fell 5 per cent to $2.9 billion or $2.13 per share, according to the report.