PepsiCo reported better-than-expected earnings and revenue in the second quarter despite sluggish North American sales.
Sales of Frito-Lay and other snacks fell 1% in North America during the April-June period, PepsiCo said Thursday, while beverage sales slid 2% in the region.
Years of double-digit price increases from PepsiCo and changing consumer preferences has weakened demand for the company's drinks and snacks, PepsiCo said in February. It said Thursday that it's trying to combat perceptions that its products are too expensive by expanding distribution of value brands like Chester's and Santitas.
Sales rose in some other regions, including Latin America and Asia. PepsiCo said low- or no-sugar versions of its trademark Pepsi saw strong sales globally.
Revenue rose less than 1% to $22.7 billion in the April-June period. That was higher than the $22.3 billion Wall Street forecast, according to analysts polled by FactSet.
PepsiCo’s net income fell 59% to $1.3 billion. Adjusted for one-time items, including impairment charges related to its Rockstar and Be & Cheery brands, PepsiCo earned $2.12 per share. That was also higher than the $2.03 analysts had forecast.
PepsiCo shares rose less than 2% in premarket trading Thursday.
PepsiCo lowered its full-year earnings expectations in April, citing increased costs from tariffs and a pullback in consumer spending. The company reaffirmed that guidance Thursday.
Its tariff costs have risen since then. In June, the Trump administration hiked the tariff on imported aluminum from 25% to 50%.