PepsiCo reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.
The Purchase, New York-based company said revenue rose 2% to $18.3 billion for the January-April period. That was higher than the $18 billion Wall Street forecast, according to analysts polled by FactSet.
Pepsi reaffirmed its financial guidance for 2024, including organic revenue growth of 4%. The company has said it expects to return to more normal rates of growth this year after several years of inflation-driven price increases.
That may have disappointed investors who have grown used to stronger growth at PepsiCo. Last year organic revenue grew 9.5%, for example. PepsiCo's shares fell more than 2.5% in morning trading Tuesday.
In North America Frito-Lay revenue rose 2% while Pepsi beverage sales were up 1%. Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars and snacks because of potential contamination with salmonella. Quaker Foods sales dropped 24% during the quarter.
But the company saw 11% sales growth in Asia Pacific and 10% sales growth in Europe.
PepsiCo Chairman and CEO Ramon Laguarta said the company is optimistic that consumer demand will continue to rise this year in the U.S. and elsewhere.
“The consumer, globally, we think is very resilient,” Laguarta said during a conference call with investors. “It's basically supported by two facts: very low unemployment or quite low unemployment globally and wages growing at a good pace in the majority of the countries where we participate.”
In Europe, sales were driven by demand in Eastern Europe, Laguarta said. In Western Europe, consumers saw fewer PepsiCo snacks and drinks on grocery shelves during the quarter. Carrefour, one of Europe’s largest supermarket chains, announced in January that it was pulling PepsiCo products from stores in France, Belgium, Spain and Italy due to unacceptable price increases. The two companies resolved their pricing dispute and Carrefour began restocking PepsiCo products in early April.
The company said it also saw double-digit organic revenue growth in Mexico, Brazil, Egypt, Pakistan, China and Australia.
But Laguarta added a note of caution. Consumer spending in China remains cautious, he said, and PepsiCo is also keeping a close eye on lower-income consumers in the U.S., who are buying fewer snacks or switching to store brands in the face of higher prices.
“The lower-income consumer in the U.S. is stretched,” he said. “That’s a consumer that we are emphasizing in our commercial programs and we are learning how best to keep that consumer in our categories.”
PepsiCo has leaned heavily into price increases over the past two years to combat higher ingredient costs. The fourth quarter of 2023 was the company’s eighth straight quarter of double-digit percentage price increases.
Those increases moderated in the first quarter. PepsiCo said net pricing was up 5% globally during the quarter, while volumes fell 2%. PepsiCo has said some of that volume decline is strategic. The company has been shrinking package sizes to meet consumer demand for convenience and portion control.
PepsiCo said its net earnings rose 5.6% to $2 billion in the first quarter. Excluding special items, the company earned $1.61 per share. That beat Wall Street’s forecast of $1.52.
FILE - Boxes of Pepsi are displayed in a grocery store, Ill., Thursday, Feb. 10, 2022. PepsiCo reports earnings on Tuesday, April 23, 2024. (AP Photo/Nam Y. Huh)
NEW YORK (AP) — Aryna Sabalenka left the U.S. Open in tears 12 months ago as the runner-up. She exited in the semifinals each of the two years before that. This time, Sabalenka was in a joking mood after winning her first championship at Flushing Meadows and the third Grand Slam title of her career.
Sabalenka, the No. 2 seed, got past No. 6 Jessica Pegula 7-5, 7-5 in a rollicking final under a closed retractable roof at Arthur Ashe Stadium on Saturday, adding this triumph to the two she earned at the Australian Open each of the past two seasons, also on hard courts.
“So many times, I thought I was so close to get a U.S. Open title. It’s been a dream of mine. Finally, I got this beautiful trophy. It means a lot,” said Sabalenka, a 26-year-old from Belarus, who is on a 12-match winning streak.
“I remember," she said, "all those tough losses in the past here.”
That includes in the semifinals in both 2021, against Leylah Fernandez, and 2022, against No. 1 Iga Swiatek.
Most poignant, of course, was last year, when Sabalenka was rattled by the Ashe crowd, blew a set advantage and was defeated by Coco Gauff. Like Gauff, Pegula is an American, but the spectators were far more generous toward Sabalenka on Saturday, applauding her best efforts and even obliging when she waved her arms to ask for extra noise.
Afterward, Sabalenka thanked the fans for cheering for her — which probably (wink, wink) was unrelated to her kidding offer of “Drinks on me” after an earlier victory.
Pegula, a native New Yorker whose parents own the NFL’s Buffalo Bills and NHL’s Buffalo Sabres, was participating in a major final for the first time at age 30. She’s won 15 of her past 17 matches over the past month; both losses came against Sabalenka.
“I know how tough it is to lose in the final, but you’re showing some amazing tennis, and I’m more than sure that one day, you’re going to get one,” Sabalenka told Pegula during the on-court ceremony, then paused and added with a chuckle: “I mean, not (just) one. Maybe more. But let’s start from one Grand Slam.”
To Pegula's credit, she did not fold after Sabalenka reeled off five consecutive games to grab the opening set and move ahead 3-0 in the second. In the next game, Pegula dropped a point and showed her frustration by whacking a ball off the video wall behind the baseline, dislodging a little square panel.
Maybe that released some tension, because suddenly Pegula asserted herself, using her own five-game run to go up 5-3. But when she served at 5-4 with a chance to force a third set, Pegula let Sabalenka level the second with a break.
“Was able to find some good tennis, just wasn’t quite able to sustain it,” Pegula said. “She played some big tennis in big moments.”
Indeed, that began a three-game surge for Sabalenka, who soon was collapsing to the court, dropping her racket and covering her face with both arms.
“Everyone is like, ‘Congrats! Amazing tournament!’” Pegula said. “I’m like, ‘Eh, whatever.’”
Sabalenka is as demonstrative as anyone, her body language usually a spot-on barometer of whether things are going well — or not — for her. But as she sputtered at the start Saturday, it was tough to read what she was thinking against Pegula, who eliminated Swiatek in the quarterfinals.
Even while down an early break and being a point from trailing 3-1, Sabalenka reacted to mistakes by calmly turning her back and taking deep breathing as star athletes from other sports such as Stephen Curry, Lewis Hamilton and Noah Lyles looked on from the stands.
Once Sabalenka got going, once her booming strokes — her forehands were the fastest of the past two weeks, speedier than any woman’s or man’s — were calibrated just so, it became apparent the outcome would be determined by what she did.
By the close, the statistics made that obvious: Sabalenka finished with far more winners than Pegula, 40-17, and also more unforced errors, 34-22. Sabalenka controlled most exchanges, with Pegula mainly stuck responding as best she could.
“She’s super powerful. Goes for her shots. She’s definitely not going to give you anything,” Pegula said. “I was happy I was able to fight back and give myself a chance, but in the end it wasn’t enough.”
There was one moment of clear anger from Sabalenka. It came at 5-all in the first set, when she double-faulted to face a break point, then leaned forward and cracked her racket against the court four times while holding the handle with both fists.
Seemed to work. She saved that break point, wound up taking that game, then broke Pegula to own the opening set.
A year ago, Sabalenka blew that lead against Gauff. The year before, Sabalenka blew that lead against Swiatek.
Didn't let it happen again.
“In that second set, honestly, I was just praying there,” said Sabalenka, who collected a $3.6 million winner's check. “I was literally standing there and praying.”
AP tennis: https://apnews.com/hub/tennis
Aryna Sabalenka, of Belarus, records images after defeating Jessica Pegula, of the United States, in the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, left, and Jessica Pegula, of the United States, wait for the start of the trophy ceremony after Sabalenka defeated Pegula in the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Billie Jean King poses with Jessica Pegula, left, of the United States, and Aryna Sabalenka, of Belarus, following the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. Sabalenka won the match (AP Photo/Frank Franklin II)
Aryna Sabalenka, of Belarus, poses for photos with the championship trophy after defeating Jessica Pegula, of the United States, in the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Aryna Sabalenka, of Belarus, can't catch up with a shot from Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, wait for the start of the trophy ceremony after Sabalenka won the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
Aryna Sabalenka, of Belarus, kisses the championship trophy after defeating Jessica Pegula, of the United States, in the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, reacts after defeating Jessica Pegula, of the United States, to win the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, reacts after defeating Jessica Pegula, of the United States, to win the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
CORRECTS SPELLING OF LAST NAME TO BLOOMBERG, NOT BLOOMBURG - Michael Bloomberg and partner Diana Taylor, left, watch the women's singles final of the U.S. Open tennis championships between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Tina Fey watches the women's singles final of the U.S. Open tennis championships between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Lewis Hamilton and Anna Wintour watch the women's singles final between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Aryna Sabalenka, of Belarus, can't catch up with a shot from Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
Jessica Pegula, of the United States, reacts after scoring a point against Aryna Sabalenka, of Belarus, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, reacts in the second set against Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, kicks the ball after double faulting Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
Flavor Flav arrives for the women's singles final of the U.S. Open tennis championships between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Billie Jean King, center, her wife Ilana Kloss and USTA president Brian Hainline, arrives for the women's singles final of the U.S. Open tennis championships between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
CORRECTS SPELLING OF FIRST NAME TO STEPHEN, NOT SPETH, ADDS WIFE's NAME - Stephen Curry, center, and his wife Ayesha Curry arrive for the women's singles final of the U.S. Open tennis championships between Aryna Sabalenka, of Belarus, and Jessica Pegula, of the United States, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Aryna Sabalenka, of Belarus, cools off with an ice pack between games against Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, reacts against Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Kirsty Wigglesworth)
Aryna Sabalenka, of Belarus, returns a shot to Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, returns a shot to Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Kirsty Wigglesworth)
Jessica Pegula, of the United States, reaches for a shot by Aryna Sabalenka, of Belarus, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Kirsty Wigglesworth)
Aryna Sabalenka, of Belarus, reacts in the first set against Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Julia Nikhinson)
Jessica Pegula, of the United States, reacts in the second set against Aryna Sabalenka, of Belarus, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Seth Wenig)
Aryna Sabalenka, of Belarus, reacts against Jessica Pegula, of the United States, during the women's singles final of the U.S. Open tennis championships, Saturday, Sept. 7, 2024, in New York. (AP Photo/Frank Franklin II)
Aryna Sabalenka, of Belarus, reacts after scoring a point against Emma Navarro, of the United States, during the women's singles semifinals of the U.S. Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)
Jessica Pegula, of the United States, reacts after defeating Karolina Muchova, of the Czech Republic, during the women's singles semifinals of the U.S. Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)
