### PepsiCo Falls Short of Revenue Expectations Amid Challenging North American Trends

PepsiCo has reported mixed results for its third quarter, narrowly surpassing earnings expectations but falling short on revenue. The company's adjusted earnings per share stood at $2.31, slightly above the anticipated $2.30. However, revenue reached $23.3 billion, missing the $23.8 billion forecast.

JPMorgan analyst Andrea Teixeira expects PepsiCo's stock to remain "negative to neutral." According to Teixeira, the lower-than-expected organic sales growth and steady profit outlook were foreseeable in light of persistent challenges in North American markets, offset by stronger margins and productivity.

Despite these setbacks, PepsiCo remains optimistic about its core constant currency earnings per share, projecting an 8% increase. This comes on the heels of a 12% growth in the previous year, showcasing the company's robust operating model, according to Jefferies analyst Kaumil Gajrawala.

CEO Ramon Laguarta emphasized that PepsiCo will continue to invest in commercial activities and brand support to stimulate consumer demand. He noted that the third-quarter performance was hindered by several factors, including subdued performance trends in North America, recalls at Quaker Foods North America, and disruptions from rising geopolitical tensions in select international markets.

In addition, PepsiCo's North American segments—Frito-Lay, Quaker Foods, and PepsiCo Beverages—all fell short of expectations as higher grocery store prices weighed on consumer demand. In a bid to offer "more value to consumers," the company has made significant investments to improve in-store availability and presence, resulting in a slightly better-than-expected decline for its Frito-Lay segment.

Consumers grappling with inflationary pressures and higher borrowing costs have notably impacted PepsiCo’s snack segment. The company reported a 1.5% decline in Frito-Lay's volume for the quarter, versus an expected 1.81%.

Additionally, PepsiCo is increasing its focus on healthier alternative brands like SunChips, Stacy's, and PopCorners. Following Q3, the company announced its acquisition of Siete Foods, a Mexican-American meal and snack brand, for $1.2 billion.

In other regions, PepsiCo's performance varied. Organic revenue growth in Europe was 6%, falling short of the 7.45% expected. Latin America saw a 3% increase, compared to the 4.49% anticipated. In the Africa, Middle East, and South Asia region, growth was 6%, against an 11.40% expectation. The Asia Pacific, Australia, New Zealand, and China region saw a decline of 1%, far below the 2.92% growth forecast.

Despite these mixed results, the company remains committed to stimulating consumer demand and improving its market offerings, as evidenced by its latest strategic acquisitions and continued investment in commercial activities.