PepsiCo Inc (NASDAQ:PEP, ETR:PEP) shares fell 4.4% to $143.62 after it served up a mixed set of quarterly numbers, with domestic sales down for the fifth period in a row, but a 5% increase in the annual dividend.
Group revenue came in at $27.78 billion for the fourth quarter, slightly below the $27.89 billion that Wall Street expected. Net revenue growth was negative at -0.2% for the quarter, while for the full year was up 0.4%.
Chairman and CEO Ramon Laguarta blamed "subdued category performance trends in North America" as well as the continued impact of a product recall for Quaker Foods division and disruptions from geopolitical tensions in some international markets.
However, he hailed improvements in gross margin, operating margin expansion and earnings per share, all on the back of productivity initiatives.
Adjusted EPS of $1.96 were reported for the fourth quarter, just beating the $1.94 the Street expected.
Looking ahead, Laguarta said Pepsi will look "to build upon the successful expansion of our international business, while also taking actions to improve performance in North America".
Productivity initiatives will help fund commercial investments and aid profitability, leading to full-year 2025 guidance for "low-single-digit" percentage growth in organic revenue and "mid-single-digit" in core EPS on a constant currency basis.
The company announced a 5% in its dividend to $5.69 per share, expected to be paid in June 2025, meaning that cash returns to shareholders are expected to be roughly $8.6 billion, comprised of dividends of $7.6 billion and share repurchases of $1.0 billion.