PepsiCo cuts profit outlook on nagging inflationary pressures

Brian Sozzi

PepsiCo's full year profit outlook has a little less fizz as the beverage and snacks giant battles higher than expected inflation.

On Tuesday, the company cut its full year "core" earnings outlook to $6.63 a share from $6.67 previously. The outlook cut — which is somewhat out of character for the steady Eddie PepsiCo —is that much more disappointing considering the company raised its full-year organic sales growth projection.

For the year, PepsiCo now sees organic sales growth of 8% compared to 6% previously.

PepsiCo CEO Ramon Laguarta acknowledged "higher than expected input cost inflation for the balance of 2022" on the earnings release.

A woman wearing a face mask walks past a Pepsi ad in Mexico on February 13, 2022. (Photo by Artur Widak/NurPhoto via Getty Images)
A woman wearing a face mask walks past a Pepsi ad in Mexico on February 13, 2022. (Photo by Artur Widak/NurPhoto via Getty Images) (NurPhoto via Getty Images)

Here is how PepsiCo performed compared to Wall Street estimates:

  • Net Sales: $16.20 billion vs. $15.57 billion

  • Organic Sales Growth: +13.7% vs. +9.68%

  • Diluted EPS: $1.29 vs. $1.23

Shares of PepsiCo were relatively unchanged in pre-market trading.

Inflationary pressures on PepsiCo's business in the first quarter weren't hard to spot.

Core operating profits grew at a much slower pace than organic sales at the company's key Frito Lay North America, Quaker Foods North America and Asia Pacific businesses.

PepsiCo North America Beverages was a bright spot with organic sales increased 13% and operating profits rising 21%.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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