PepsiCo Stock: Shares Hit 52-Week Low After Earnings

PepsiCo's stock has plummeted to a new 52-week low of $138.32 following disappointing first-quarter results. The beverage and snack giant reported earnings per share of $1.48, falling short of analysts' expectations of $1.51. While revenue slightly exceeded forecasts at $17.92 billion, it still represented a 1.8% decline compared to the previous year. The company's North American operations exhibited significant weakness, with the Frito-Lay division particularly underperforming and dragging down overall growth. These challenges prompted management to cut their full-year outlook, citing new tariffs and macroeconomic uncertainties as major concerns. The immediate market reaction was swift, with shares dropping approximately 2% after the earnings announcement, contributing to a substantial 21.5% decline over the past year.

Profit Pressures Mount

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The financial strain is evident in PepsiCo's bottom line, which has contracted to $1.83 billion from over $2 billion in the same period last year. Management now expects a 3% decrease in adjusted earnings per share for fiscal 2025, revising previous projections that had anticipated modest growth. Despite maintaining its forecast for low single-digit organic revenue growth, investor confidence appears shaken. Thirteen analysts have already downgraded their profit expectations for the company. While PepsiCo still boasts impressive fundamentals, including a 54.89% gross profit margin and a 52-year streak of dividend increases, the market's focus has shifted to how the company will navigate these headwinds, particularly regarding strengthening the struggling Frito-Lay segment and mitigating tariff impacts.