01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
PepsiCo, Inc. reported its first-quarter results for the period ending March 22, 2025, with a net revenue of $17.9 billiona, a 2% decrease compared to the prior year's $18.25 billion.
This decline was primarily attributed to unfavorable foreign exchange impacts and higher commodity costs, partially offset by productivity savings and effective net pricing. Operating profit saw a 5% decrease, falling to $2.58 billionb from $2.72 billion in the same period last year, with operating margin contracting slightly to 14.4% from 14.9%. Net income attributable to PepsiCo decreased by 10% to $1.83 billion, resulting in diluted earnings per share of $1.33, down from $1.48 in the prior year.
The company highlighted strategic investments, including the acquisition of Siete for $1.2 billionc, which contributed to a significant increase in investing activities. Despite revenue pressures, PepsiCo continued to return capital to shareholders, with a 5% increase in its annualized dividend and ongoing share repurchase programs.
02—Key points
Key Highlights
- Net revenue for the quarter was $17.9 billion, a 2% decrease year-over-year, impacted by foreign exchange and commodity costs.
- Operating profit decreased by 5% to $2.58 billion, with operating margin declining to 14.4% from 14.9%.
- Net income attributable to PepsiCo declined 10% to $1.83 billion, and diluted EPS fell to $1.33 from $1.48.
- The company completed the acquisition of Siete for $1.2 billion, contributing to increased investing activities.
- Financing activities provided $1.8 billion in net cash, driven by significant debt issuances, while capital returns to shareholders included an increased dividend and share repurchases.
- Restructuring charges of $213 million were recorded under the 2019 Productivity Plan, impacting earnings.
- International operations faced headwinds from unfavorable foreign exchange, notably impacting revenue in EMEA and Latin America Foods segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Pepsico Inc kept $0.10.
- Revenue$17.92B100.0%
- Cost of revenue−$7.93B44.2%
- Gross profit$9.99B55.8%
- Operating costs−$7.41B41.4%
- Operating income$2.58B14.4%
- Interest, other & tax−$749.0M4.2%
- Net income$1.83B10.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 24, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $17.92B$18.25B | −1.8% |
| Cost of Revenue | $7.93B$8.25B | −3.9% |
| Gross Profit | $9.99B$10.00B | −0.1% |
| SG&A Expenses | $7.41B$7.29B | +1.7% |
| Operating Income | $2.58B$2.72B | −4.9% |
| Interest Expense | $264.00M$202.00M | +30.7% |
| Net Income | $1.83B$2.04B | −10.2% |
| EPS (Basic) | $1.34$1.49 | −10.1% |
| EPS (Diluted) | $1.33$1.48 | −10.1% |
| Shares Outstanding (Basic) | 1.37B1.38B | −0.2% |
| Shares Outstanding (Diluted) | 1.38B1.38B | −0.3% |
05—Questions
Frequently Asked Questions
What drove the decrease in net revenue for the quarter?
The decrease in net revenue was primarily driven by unfavorable foreign exchange translation, which had a 3 percentage point negative impact, and higher commodity costs. These were partially offset by productivity savings and effective net pricing.
How did the acquisition of Siete impact the financial statements?
PepsiCo acquired Siete for $1.2 billion in cash on January 17, 2025. This acquisition contributed to an increase in investing activities, with $1.2 billion in net cash used for investing activities during the quarter, primarily reflecting this acquisition and net capital spending.
What is the company's outlook on returning capital to shareholders?
PepsiCo announced a 5% increase in its annualized dividend to $5.69 per share and expects to return approximately $8.6 billion to shareholders in 2025, comprising dividends of roughly $7.6 billion and share repurchases of about $1.0 billion. The company has an ongoing $10 billion share repurchase program.
Are there any significant charges impacting profitability this quarter?
Yes, PepsiCo recorded $213 million in restructuring and impairment charges related to its 2019 Productivity Plan. This plan involves simplifying processes, re-engineering systems, and optimizing the manufacturing and supply chain footprint, with a total expected pre-tax charge of approximately $6.15 billion.
06—Continue