PepsiCo profit gets bump, but sales slip after price hikes

FILE - A soda dispenser machine featuring Pepsi products is shown, Monday, March 27, 2022, in Miami Gardens, Fla.  PepsiCo reports earnings on Friday, Feb. 9, 2024. (AP Photo/Wilfredo Lee)
FILE - A soda dispenser machine featuring Pepsi products is shown, Monday, March 27, 2022, in Miami Gardens, Fla. PepsiCo reports earnings on Friday, Feb. 9, 2024. (AP Photo/Wilfredo Lee)

PepsiCo got a bump to fourth quarter profits thanks in part to lower charges and continued price hikes, but higher prices have weakened consumer demand for the company's snacks and drinks.

The New York company said Friday it expects organic revenue growth of at least 4 percent this year, less than half the 9.5 percent growth that PepsiCo booked in 2023.

Shares dropped 3 percent at the opening bell even as the company announced a 7 percent boost to its annual dividend, and said it would buy back about $1 billion of its shares.

Revenue slipped to $27.86 billion from $28 billion and it was a rare miss for the company. Wall Street had projected revenue of $28.24 billion.

Those revenues retreated in tandem with volume as the company got more money for products, but sold less of them.

Volume for Frito-Lay North America fell 2 percent in the final quarter of the year, and beverages North America in North America slid 6 percent. Volumes for Pepsi convenience foods in Latin America also declined 6 percent, and there was a 1 percent decline in Europe. In Asia Pacific, Australia and New Zealand and the China region, convenience foods volume fell 4 percent.

Volume fell 8 percent in the Quaker Foods North America unit, as the division dealt with a recall.

Pepsi has wrestled with higher prices and how to pass those costs along, raising prices by double-digit percentages for several quarters.

Global supermarket chain Carrefour said last month it will stop selling PepsiCo products in its stores in France, Belgium, Spain and Italy due to price increases for popular items like Lay's potato chips, Quaker Oats, Lipton Iced Tea and its namesake soda.

PepsiCo said at the time it would continue to engage in good faith with Carrefour to try to ensure that it products remained available.

PepsiCo Inc., based in Purchase, New York, has said price increases should ease and largely align with inflation, which has fallen considerably.