PepsiCo Inc (NASDAQ:PEP, ETR:PEP) has slashed its full-year profit outlook on higher expected supply chain costs stemming from tariffs, elevated macroeconomic volatility and a subdued consumer environment.
Along with reporting its first quarter earnings, the company said it now expects constant currency earnings per share to be even with the previous year, down from its earlier forecast of mid-single-digit growth.
It continues to expect a low-single-digit increase in organic revenue.
“As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs,” Pepsi CEO Ramon Laguarta said in a statement.
“At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.”
For Q1, Pepsi posted a 1.8% decline in revenue to $17.92 billion, above Wall Street expectations of $17.73 billion.
Adjusted earnings per share of $1.48 missed estimates of $1.50.
Shares of Pepsi traded down 1% at $140 shortly before US markets opened on Thursday.