PepsiCo Reports Mixed Financial Results for 12 and 36 Weeks Ended September 7, 2024

PepsiCo, Inc. reported its financial results for the 12 and 36 weeks ended September 7, 2024, revealing a mixed performance compared to the previous fiscal period. For the 12 weeks, net revenue decreased by 1% to $23,319 million from $23,453 million in the same period last year. Gross profit, however, increased to $12,923 million, up from $12,778 million, while operating profit fell to $3,872 million from $4,015 million, reflecting a 4% decline. Net income attributable to PepsiCo for the quarter was $2,930 million, down 5% from $3,092 million, resulting in a diluted earnings per share of $2.13, compared to $2.24 in the prior year.

In contrast, for the 36 weeks ended September 7, 2024, total net revenue rose by 1% to $64,070 million, up from $63,621 million. Operating profit for this period increased by 3% to $10,637 million, compared to $10,303 million in the previous year. Net income attributable to PepsiCo for the 36 weeks was $8,055 million, a 4% increase from $7,772 million, with diluted earnings per share rising to $5.84 from $5.62.

Segment performance varied significantly. The Frito-Lay North America (FLNA) segment reported a slight revenue decline of 1% for the 12 weeks, driven by a decrease in organic volume, while the Quaker Foods North America (QFNA) segment experienced a significant 13% revenue drop, primarily due to a voluntary recall. Conversely, the PepsiCo Beverages North America (PBNA) segment saw a modest revenue increase of 0.2%. In the 36-week period, FLNA's revenue remained stable, while QFNA's revenue fell by 18%.

Strategically, PepsiCo announced the acquisition of Garza Food Ventures LLC (Siete Foods) for approximately $1.2 billion, expected to close in the first half of 2025, subject to regulatory approvals. The company also continued to implement its 2019 Multi-Year Productivity Plan, incurring pre-tax charges of $2.3 billion to date, with expectations of an additional $300 million in charges for the remainder of 2024.

Cash flow metrics showed a decline in net cash provided by operating activities, which totaled $6.2 billion for the 36 weeks, down from $7.6 billion in the prior year. Free cash flow also decreased to $3.547 billion from $5.224 billion. The company declared cash dividends of $5.483 billion for the 36 weeks, up from $5.093 billion in the previous year, reflecting a 7% increase in the annualized dividend to $5.42 per share.

Overall, while PepsiCo's long-term growth trajectory appears stable, short-term challenges, particularly in specific segments and external market conditions, have impacted its financial performance.