PepsiCo’s core operating margin fell to 16.3% in the first half, moving against its target of a 100-basis-point increase over three years. Analysts expect third-quarter revenue to rise 4.3% to $24.96 billion and adjusted earnings per share to increase 0.21% to about $2.29.
PepsiCo is running out of time to meet growth and margin targets set after activist investor Elliott Investment Management took a roughly $4 billion stake a year ago, as GLP-1 drugs intensify concerns about demand for salty snacks and sugary drinks. Its core operating margin was 16.3% of revenue in the first half, 15 basis points below a year earlier, despite productivity savings and price cuts.
Volumes have contracted in PepsiCo’s major North America business as the company faces higher input costs stemming from the Iran war and persistent inflation curbing consumer demand. The company has launched products including Doritos Protein, SunChips Fiber and Good Warrior beef sticks, while an analyst said sales remain flat and the Frito-Lay business is losing market share.
Analysts expect third-quarter revenue of $24.96 billion, up 4.3%, and adjusted earnings per share of about $2.29, up 0.21%. PepsiCo is scheduled to report results on Thursday.
