PepsiCo lowered its organic revenue forecast for the year after U.S. consumers continued to pull back on buying its snacks and drinks.
The company, based in Purchase, New York, said Tuesday it now expects its organic revenue -- which is adjusted for foreign currency exchanges and the impact of product acquisitions or divestments – to increase in the low single-digit range for the year. It had expected an increase of 4%.
PepsiCo said its performance in North America was "subdued," hurt by a big recall of its Quaker Oats granola bars and cereals as well as weak demand for its Frito-Lay snacks and drinks. Frito-Lay North America's sales volumes slipped 1.5%, while North American beverage volumes fell 3%.
Consumers began to push back on higher prices this summer after years of increases, and PepsiCo vowed to lower the cost of some products like potato chips and tortilla chips. Frito-Lay prices edged up by just 0.5% in the third quarter, the company said.
Globally, PepsiCo said it raised prices 3%. Sales volumes were down in every market except Europe.
Third quarter revenue was flat at $23.3 billion. Wall Street had expected revenue of $23.8 billion, according to analysts polled by FactSet. PepsiCo's quarterly revenue growth — which had frequently grown by double-digits in recent years — has slowed sharply in the last few quarters.
Net income fell 5% to $2.9 billion, or $2.13 per share. Adjusted for one-time items, PepsiCo earned $2.31 per share, which was higher than the $2.29 per share analysts were expecting.
PepsiCo shares fell 1% in premarket trading.