PepsiCo Inc (NASDAQ:PEP) stock fell 0.68% (As on July 18, 11:23:57 AM UTC-4, Source: Google Finance) after the company maintained its annual outlook and reported sales growth that beat Wall Street estimates, citing strong international growth. The unit volume was down 1.5% for the convenient food business and was flat for the beverage business. Foreign currency impacted revenues by 1.5%. On an organic basis, revenues grew 2.1% year over year, reflecting a sequential improvement. The rise was driven by a 4% increase in effective net pricing, offset by a 1.5% decline in organic volume. On a consolidated basis, the reported gross profit declined 1.3% year over year to $12.4 billion. The core gross profit declined 0.4% year over year to $12.5 million. The reported gross margin declined 120 bps, whereas the core gross margin fell 80 bps year over year. PEP ended second-quarter 2025 with cash and cash equivalents of $7.6 billion, long-term debt of $39.3 billion, and shareholders’ equity (excluding non-controlling interest) of $18.4 billion. Net cash provided by operating activities was $996 million as of June 14, 2025, compared with $1.3 billion as of June 15, 2024.

Moreover, on a reported basis, PepsiCo witnessed revenue growth across most operating segments, except for PBNA and LatAm Foods. Revenues on a reported basis rose 1% year over year in PFNA, 8% in EMEA, 3% in IB Franchise and 0.5% in Asia Pacific Foods. However, reported revenues were flat in PBNA and declined 7% in LatAm Foods. PEP’s organic revenues improved across most operating segments, except for PFNA and Asia Pacific Foods. Organic revenues rose 1% for PBNA, 5% for IB Franchise, 7% for EMEA and 6% for the LatAm Foods segment. However, organic revenues declined 2% for the PFNA and were flat for the Asia Pacific Foods segment.

PEP in the second quarter of FY25 has reported 7 percent decline in the adjusted earnings per share of $2.12, beating the analysts’ estimates for the adjusted earnings per share of $2.03, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 1 percent to $22.73 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $22.39 billion. PepsiCo reported an operating income of $1.8 billion, which fell 55.8% year over year. The core operating income declined 5.1% year over year to $3.9 billion. The core constant-currency operating income declined 1% year over year. The operating margin contracted significantly to 7.9% from 18% in the year-ago quarter on a reported basis.

PEP anticipated the core gross margin to contract 20 bps year over year to 55.7% in the second quarter. In dollar terms, core gross profit was expected to decline 0.8% year over year.