PepsiCo (PEP) beat Wall Street projections on both the top and bottom lines in the third quarter, but its US snacking business continues to experience turbulence.
PepsiCo stock rose more than 1% in trading on Thursday.
Revenue came in at $23.94 billion, slightly beating Wall Street’s expectations of $23.85 billion, per Bloomberg consensus data. Adjusted earnings per share came in at $2.29, beating the expectations of $2.27.
In North America, its beverage business offset an ongoing slowdown in its food business. Revenue for beverages in the quarter grew 2%.
Chairman and CEO Ramon Laguarta said that “net revenue growth accelerated and reflects the resilience of our international business, improved momentum within North America Beverages, and the benefits of our portfolio reshaping actions.”
The trademark Pepsi brand grew both volume and net revenue, and the company said its hydration offerings, such as Propel, delivered strong volume too. The company also said the acquisition of Poppi for $1.95 billion is paying off, with a more than 50% increase in retail sales for that brand from a year ago. As of early September, it’s now a part of PepsiCo’s distribution system. The company said it is “excited about its growth potential.”
As the snacking slowdown continues in the US, Pepsi’s food business remains under pressure. Food revenue fell 3% as Pepsi “continues to work toward improving its performance trajectory with a high sense of urgency.”
That was offset by 5.5% revenue growth in its Europe, Middle East, and Africa business and 4% growth in Latin America.
Meanwhile, activist pressure is building in the background. In September, investor Elliott Management disclosed a $4 billion stake in the company, calling for a turnaround. The company also faces pressure from RFK Jr.’s Make America Healthy Again (MAHA) initiatives.
Pepsi stock is down nearly 8% year to date, while rival Coca-Cola (KO) is up roughly 6%.
The company reiterated its fiscal 2025 guidance. It still expects low-single-digit organic revenue growth with core constant currency earnings per share to be approximately even with the prior year.
The company also announced that CFO Jamie Caulfield will retire and Steve Schmitt will take the role, effective Nov. 10. Schmitt most recently served as CFO for Walmart US.
Board member Darren Walker, who is president of the Ford Foundation, also plans to leave the board on Nov. 19.
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.