PepsiCo reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.
The Purchase, New York-based company said revenue rose 2% to $18.3 billion for the January-April period. That was higher than the $18 billion Wall Street forecast, according to analysts polled by FactSet.
In North America Frito-Lay revenue rose 2%, while Pepsi beverage sales were up 1%. Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars and snacks because of potential contamination with salmonella. Quaker Foods sales dropped 24% during the quarter.
But the company saw 11% sales growth in Asia Pacific and 10% sales growth in Europe.
Sales in Europe grew despite fewer products on grocery shelves in some countries. Carrefour, one of Europe’s largest supermarket chains, announced in January that it was pulling PepsiCo products from store shelves in France, Belgium, Spain and Italy due to unacceptable price increases. The two companies resolved their pricing dispute and Carrefour began restocking PepsiCo products in early April.
PepsiCo has leaned heavily into price increases over the past two years to combat higher ingredient costs. The fourth quarter of 2023 was the company’s eighth straight quarter of double-digit percentage price increases.
But those increases moderated in the first quarter. PepsiCo said net pricing was up 5% globally during the quarter, while volumes fell 2%. PepsiCo has said some of that volume decline is strategic. The company has been shrinking package sizes to meet consumer demand for convenience and portion control.
PepsiCo said its net earnings rose 5.6% to $2 billion in the first quarter. Excluding special items, the company earned $1.61 per share. That beat Wall Street’s forecast of $1.52.
PepsiCo shares were flat in premarket trading Tuesday.