CAGNY: PepsiCo’s a Powerhouse, But Worries About North America
Bottom line, PepsiCo had a good 2024. Un-PepsiCo-like but good enough. A company that has been turning in multi-billion-dollar sales increases for several years now recorded “only” a $383 million gain last year, to nearly $91.9 billion. Net income remained good, up 5.5% to $9.6 billion.
There were troubling signs in the company’s fourth-quarter and full-year 2024 reports – every North American business segment lost sales last year. The Frito-Lay division was down $439 million; Quaker Foods down $189 million; PepsiCo Beverages down $282 million. If it hadn’t been for the extraordinary leap in European sales – eclipsing $2 billion from just $767 million in 2023 – there would be trouble in Purchase, N.Y.
Chairman and CEO Ramon Laguarta didn’t show any anxiety in his presentation Wednesday to the Consumer Analysts Group of New York, although he did say they were “paying attention to price points, value sizes and bonus bags.” And “Clearly our investment in international is paying off for us and we continue to develop that business at a faster pace.
“We're becoming better at international. We are becoming much better and we keep investing,” he said. “We're building very large-scale organizations and businesses highly capable in many of the key markets around the world. Mexico, Brazil, India, large population markets where we now have very scaled businesses have been growing at double-digits; China and UK high single-digits.
“Now, the star has been Pepsi Zero [or] Pepsi Max in some countries around the world. It’s been a focus for us for the last 10-15 years and is now a $10 billion business, growing double-digit and keeping consumers in the cola category and making our brand preferred in many parts around the world.”
Gatorade and Propel are more than $12 billion globally and growing at high single-digits. Energy now accounts for $7 billion globally.
Despite the mixed bag of numbers, PepsiCo recently announced it will increase its dividend to $5.62 per share, marking the 53rd consecutive annual dividend increase.
