PepsiCo (PEP) Q2 Earnings: What To Expect

Adam Hejl /
2024/07/10 3:00 am EDT

Food and beverage company PepsiCo (NASDAQ:PEP) will be reporting results tomorrow before market hours. Here's what investors should know.

PepsiCo met analysts' revenue expectations last quarter, reporting revenues of $18.25 billion, up 2.3% year on year. It was a mixed quarter for the company, with an impressive beat of analysts' organic revenue growth estimates but a miss of analysts' gross margin estimates.

Is PepsiCo a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting PepsiCo's revenue to grow 1.3% year on year to $22.62 billion, slowing from the 10.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.16 per share.

PepsiCo Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. PepsiCo has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 2.3% on average.

Looking at PepsiCo's peers in the consumer staples segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Constellation Brands delivered year-on-year revenue growth of 5.8%, meeting analysts' expectations, and McCormick reported flat revenue, in line with consensus estimates. Constellation Brands's stock price was unchanged after the results, while McCormick was up 4.8%.

Read our full analysis of Constellation Brands's results here and McCormick's results here.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed inflation signals have led to uncertainty around rate cuts, and while some of the consumer staples stocks have fared somewhat better, they have not been spared, with share prices down 3.9% on average over the last month. PepsiCo is down 2% during the same time and is heading into earnings with an average analyst price target of $183.7 (compared to the current share price of $161.8).

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