Tariffs and Volatile Trade Conditions Prompt PepsiCo to Cut Profit Forecast
PepsiCo has revised its 2025 earnings outlook downward, citing increased macroeconomic volatility, global trade headwinds, and rising supply chain costs—particularly those related to tariffs. The announcement, made on April 24, comes amid growing uncertainty across key international markets and a subdued consumer landscape.
The company now expects its core, constant-currency earnings per share (EPS) to remain roughly flat compared to the previous year, revising down its earlier forecast of mid-single-digit growth. In its statement, PepsiCo highlighted the financial impact of trade-related costs and exchange rate fluctuations, which it believes will continue to pressure reported net revenue and core EPS growth.
“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,” said PepsiCo chairman and CEO Ramon Laguarta. “At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.”
Laguarta noted that the company is working to mitigate the cost pressures while maintaining operational continuity and preserving long-term customer and consumer relationships.
The updated guidance follows a mixed performance in the company’s first-quarter results. PepsiCo’s organic revenue rose by 1.2%, while total net revenue increased by 1.8% to $17.92 billion. However, operating profit declined to $2.58 billion from $2.72 billion a year earlier. Net income fell to $1.84 billion, down from $2.05 billion in the same quarter last year, with earnings per share dropping 10% year on year.
Industry observers noted that even marginal deviations from expectations at PepsiCo are cause for concern. “It is exceedingly rare to see PepsiCo results fall short of consensus expectations, and while the miss was just one cent, we think it exemplifies just how challenging things are at the company today,” said Lauren Lieberman, beverages analyst at Barclays.
“PepsiCo also lowered EPS guidance for the year, calling out higher supply chain costs (tariffs), which shouldn’t have had a meaningful impact on the quarter,” she added.
As reported by GlobalData, PepsiCo’s revised forecast underscores the broader uncertainty gripping global food and beverage multinationals. With trade policies in flux and consumer confidence uneven across major markets, the company is bracing for a more challenging operating environment throughout the fiscal year.
