Pepsi Stock: Sharp Decline Hits Three-Year Low

PepsiCo's stock has experienced a significant downturn, falling to its lowest point in three years following disappointing first-quarter results. The beverage and snack giant reported earnings per share of $1.48, missing analyst expectations of $1.51, while revenue declined by 1.8% to $17.92 billion year-over-year. This poor performance triggered an immediate market reaction, with shares plummeting over 5% on Thursday alone. Management has consequently revised its 2025 outlook downward, now projecting a 3% decrease in adjusted earnings per share instead of the previously anticipated slight increase. Thirteen analyst firms have already reduced their profit expectations for the company in response to these developments.

Challenges and Potential Recovery

The traditionally robust Frito-Lay North America division has unexpectedly become a drag on overall company growth, contributing significantly to the net profit decline from over $2 billion in the previous year to $1.83 billion. Management cites new tariffs and macroeconomic uncertainties as primary factors behind the deteriorating outlook. However, a potential bright spot has emerged in Germany, where PepsiCo products are returning to Edeka and Netto store shelves after a two-year pricing dispute. While this development may provide some relief in the important German market, analysts remain concerned about the efficiency of the company's logistics platform compared to competitors.

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Source StockWorld