PepsiCo Cuts Full-Year Profit Outlook Over Tariffs

PepsiCo (PEP) shares slipped in premarket trading Thursday after the beverage and snack food giant lowered its full-year earnings outlook because of tariffs.

The company reported core, or adjusted, earnings per share (EPS) of $1.48 on sales of $17.92 billion. Analysts surveyed by Visible Alpha had expected $1.50 and $17.79 billion, respectively.

The company said it now expects core constant currency EPS to be roughly flat year-over-year, down from its previous outlook of a mid-single-digit increase. PepsiCo cited “expected higher supply chain costs related to tariffs, elevated macroeconomic volatility, and a subdued consumer backdrop” as reasons for the outlook cut.

“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,” PepsiCo CEO Ramon Laguarta said. “At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.”

Shares fell by 1% soon after the results were released. Entering Thursday, they had declined about 6% since the start of the year.

On Tuesday, the Department of Health and Human Services and Food and Drug Administration said that they plan to phase out a number of food dyes. Some of the dyes are used in popular snack foods like Frito-Lay’s Cheetos products, making the change likely to impact PepsiCo’s manufacturing process and sales once the new rules are in effect.