Beverage and snack company PepsiCo reported a drop in revenue during its fourth quarter on Friday, signaling that price hikes are denting demand for its products. It was the company’s first drop in sales year-over-year since June 2020.
During the three months ending Dec. 30, PepsiCo increased prices on its products by an average of 9%. A European grocery chain pulled PepsiCo products off its shelves last month as a result.
PepsiCo stock slid about 2% during pre-market trading on Friday.
PepsiCo’s fourth quarter by the numbers
PepsiCo’s net sales fell 0.5% to $27.85 billion in in the three months ended Dec. 30, from $27.99 billion in the same period the prior year.
Pepsi’s North American beverages saw sales by volume fall 6% in the quarter. Volume of Quaker products fell 8%, and the company’s FritoLay division saw its volume shrink 2%
“Organic volume performance was impacted by a moderation in category growth as consumer budgets have been affected by elevated borrowing costs and lower personal savings, which have driven preferences towards smaller pack sizes and immediate consumption channels,” the company said in statement.
Still, the company’s net income soared 147% year-over-year to $1.3 billion, from $518 million.
Its earnings per share came to $1.67, outperforming Wall Street expectations of $1.65, according to a consensus estimate from analysts surveyed by Factset.