01—Abstract
Summary
Summary of the 8-K filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
PepsiCo reported first-quarter 2025 results (12 weeks ended March 22, 2025) with GAAP net revenue down 1.8% to $17.9 billiona, GAAP EPS of $1.33 (down 10%), and core EPS of $1.48 (core constant currency down 4%).
Organic revenue grew 1.2%, but foreign exchange cut reported revenue by about 3 points. GAAP operating profit fell 5% to $2.58 billionb, and core operating profit was down about 1% on a constant currency basis. Results were mixed by segment: international franchise beverages, EMEA and Asia Pacific Foods were relatively stronger, while PepsiCo Foods North America (volume down 1%, core constant currency operating profit down 7%) and Latin America Foods (reported revenue down 12%) were weaker.
The company also recast its segments effective Q1 2025 to reflect a new organizational structure. The most important change for investors is guidance. PepsiCo now expects core constant currency EPS to be approximately flat versus 2024's $8.16c core EPS, down from prior expectations of mid-single-digit growth.
Management cited higher supply chain costs tied to tariffs, elevated macroeconomic volatility, and subdued consumer demand. Organic revenue growth guidance of low-single digits is unchanged, and the company reiterated approximately $8.6 billiond in total cash returns, including $7.6 billion in dividends. The previously announced 5% dividend increase (the 53rd consecutive annual increase) remains in place.
Balance sheet activity was notable in the quarter. Operating cash flow was negative at $(973) million, reflecting seasonal working capital outflows, and PepsiCo spent $1.2 billion on acquisitions. Short-term debt rose to $9.1 billion from $7.1 billion at year-end, and long-term debt increased to $39.4 billion from $37.2 billion.
Goodwill and other indefinite-lived intangibles increased, consistent with the acquisition activity. Investors will likely focus on whether mitigation actions can offset tariff-related costs and whether North America can improve performance.
02—Key points
Key Highlights
- Q1 2025 GAAP net revenue fell 1.8% to $17.9 billion; organic revenue rose 1.2%, with foreign exchange a roughly 3-point headwind.
- GAAP diluted EPS declined 10% to $1.33; core EPS was $1.48, and core constant currency EPS fell 4%.
- 2025 core constant currency EPS guidance was cut to roughly flat versus 2024's $8.16 core EPS (previously mid-single-digit growth), implying about a 3% core EPS decline on a reported basis.
- Management cited higher supply chain costs from tariffs and global trade developments, plus subdued consumer conditions, as drivers of the guidance cut.
- PepsiCo Foods North America weakened, with volume down 1% and core constant currency operating profit down 7%; management plans actions to improve North American performance.
- Operating cash flow was negative $(973) million in the quarter, while net debt rose as short-term and long-term debt increased to $9.1 billion and $39.4 billion, respectively.
- Segment reporting was recast effective Q1 2025, with foods reorganized into PFNA, LatAm Foods, EMEA, and Asia Pacific Foods, and international franchise beverages combined into one segment.
03—Questions
Frequently Asked Questions
Why did PepsiCo lower its 2025 earnings guidance?
Management now expects core constant currency EPS to be approximately flat versus 2024, down from mid-single-digit growth. The company cited higher supply chain costs from tariffs and global trade developments, elevated macroeconomic volatility, and subdued consumer demand in many markets. PepsiCo said it is planning mitigation actions where possible while trying to limit disruption to operations and customer relationships.
Is PepsiCo's dividend still at risk after the guidance cut?
The filing does not signal a dividend change. PepsiCo previously announced a 5% increase in its annualized dividend starting with the June 2025 payment, its 53rd consecutive annual increase, and it continues to expect total cash returns of about $8.6 billion for 2025, including $7.6 billion in dividends. Dividends paid in the quarter were $1.88 billion, but the lower earnings outlook could pressure coverage over time.
How did PepsiCo's business segments perform in the first quarter?
International segments generally performed better. EMEA and International Beverages Franchise posted core constant currency operating profit growth of 13% and 12%, respectively. PepsiCo Beverages North America grew core constant currency operating profit 14%, while PepsiCo Foods North America fell 7% and Latin America Foods declined 2%. Latin America Foods reported revenue fell 12%, largely due to currency.
What is the impact of foreign exchange and acquisitions on reported results?
Foreign exchange reduced reported net revenue growth by about 3 percentage points and reduced reported EPS by about 4 percentage points. Acquisitions and divestitures had a minimal net effect on total revenue. PepsiCo spent about $1.2 billion on acquisitions and investments in the quarter, which increased goodwill and other intangible assets. Management expects a foreign exchange headwind of about 3 points for full-year 2025 reported revenue and core EPS.
04—Continue