PepsiCo said on Thursday it would pursue additional cost cuts after lowering its annual core profit forecast due to sluggish demand for its snacks and beverages in North America and rising input costs.
Consumer packaged goods makers such as PepsiCo, General Mills, McCormick and Conagra Brands are navigating a tricky environment where surging input costs are straining margins, while cautious spending amid rising gas prices is hurting demand.
“Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation,” CEO Ramon Laguarta said in a statement.
Shares of the company were up about 1 per cent in premarket trading.
The company expects fiscal 2026 core earnings per share after adjusting for currency fluctuations to rise 1 per cent to 2 per cent, compared with its prior forecast of low-end of 4 per cent to 6 per cent rise.
It also expects annual organic revenue to be up about 3 per cent, compared with the prior forecast of between 2 per cent and 4 per cent.
Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Arun Koyyur, Reuters
