PepsiCo Cuts 2025 Outlook on Tariffs, FX, Weak Demand

PepsiCo reported mixed first-quarter 2025 results, with earnings and revenue both declining year over year and falling short of analyst expectations due to higher supply chain costs from new tariffs, volatile global economic conditions, and weakened consumer demand, especially in North America. The company now expects its core constant currency earnings per share to be flat compared to the prior year, a reversal from its earlier mid-single-digit growth forecast. PepsiCo also anticipates a 3% foreign exchange headwind impacting both revenue and earnings. Globally, volume for its convenient foods unit fell 3%, while beverage business volume remained flat, though organic revenue increased by 1.2%. Shares dropped after the announcement, reflecting broader softness in the consumer goods sector as other companies like P&G also lowered forecasts and some airlines withdrew guidance. CEO Ramon Laguarta highlighted ongoing efforts to improve North American performance and warned of continued volatility linked to global trade developments.