PepsiCo sees flat sales and earnings slump in full year as firm struggles with beverage sales

PepsiCo reported a sharp drop in earnings for the full year 2017 by 23% to $4.9bn, blamed on a host of factors including sales decline in its North America Beverages business unit and Quaker Foods North America business segment plus a $2.5bn one-time charge related to the new U.S. tax laws.

The US-based soft drinks maker saw declining sales in three out of six of its geographic business units. While total sales for the year rose marginally by 1% to $63.5bn, sales in its Quaker Foods North America business unit and North America Beverages unit fell by 2% respectively.

The bright spots for the beverage maker were in the company’s Frito-Lay North America business unit which grew 2%. The firm’s Latin America business segment grew 6%, while its Europe Sub-Saharan Africa business region rose 8% in the period. The company’s Asia, Middle East and North Africa business region saw sales decline of 5%, hurt by higher raw material costs, operating cost inflation and unfavourable foreign exchange translations.

Commenting on the results, PepsiCo CEO Indra Nooyi said, “We are pleased with our performance for the fourth quarter and full year 2017. We delivered these results in the midst of a dynamic retail environment and rapidly shifting consumer landscape.”

PepsiCo has also struggled with balancing its slow-growing core beverage business as consumers shift away from carbonated sugary drinks towards a healthier, less calorie plant-based alternatives. However, the core products still comprise most of the beverage company’s sales.

Looking forward to 2018 and beyond, the company said it expects to benefit from the new US Corporate tax laws, which will enable it invest in its workforce with training and also make capital investments in its businesses.

“As a reflection of our confidence in the growth prospects for our business, we expect to deliver 9 percent growth in core constant currency earnings per share in 2018,” the company said.

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One Response to PepsiCo sees flat sales and earnings slump in full year as firm struggles with beverage sales

  1. Emmanuel es5her says:

    I am in an environment that can promote the sales of your product, how can I be a marketer of your products? Esther

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