PepsiCo Second-Quarter Results Top Views; Soft US Spending Hits North American Business

PepsiCo (PEP) reported fiscal second-quarter results above Wall Street's estimates on Thursday, although soft consumer spending in the US weighed on its North American performance. The beverage and snacks giant posted adjusted earnings of $2.20 a share for the quarter ended June 13, up from $2.12 the year before and surpassing the FactSet-polled consensus of $2.19. Net revenue improved 6.4% to $24.18 billion, topping the Street's view of $23.95 billion. Revenue grew for global convenient foods and beverages, but a weakening US food and beverage category impacted North American results "with consumer budgets tightening due to rising inflationary pressures," Chief Executive Ramon Laguarta said in prepared remarks. In North America, volume was flat in the convenient foods business and dropped 4% in the beverages segment. Last week, RBC Capital Markets said PepsiCo's progress in its North American foods business may have stalled due to higher gasoline prices driven by the Middle East conflict. The stock was down 4.3% in Thursday trading. Revenue for PepsiCo's North America foods business, which includes Frito-Lay and Quaker Foods, decreased 2% to $6.37 billion, mainly.