Feb 4 (Reuters) - Pepsico ( PEP ) forecast annual profit

below expectations and missed quarterly revenue estimates on

Tuesday, as the Quaker Foods maker faces weakening demand for

its sodas and snacks such as Lay's in the U.S., its largest

market.

Shares of the company fell 2% in premarket trading.

Americans are still paring back spending on soft drinks and

salty treats to save their dollars for essential purchases,

forcing PepsiCo ( PEP ) to tap promotions for volume growth after

several quarters of slowdown wrought by price hikes.

The target is to bring back consumers leaning towards

smaller pack sizes or picking up cheaper alternatives from

retail aisles following a post-pandemic increase in prices of

PepsiCo's ( PEP ) products.

"We expect our North America performance to gradually

improve as the year progresses, and our commercial activities

take hold," executives said in the company's prepared remarks.

PepsiCo's ( PEP ) largest unit, North America beverages,

reported a 1% increase in organic revenue in the fourth quarter,

compared with a 7% rise a year ago.

Frito-Lay North America, its second-largest unit, posted

a 0.5% fall, compared with 9% growth last year.

The company's total organic volume slipped 1% for the

quarter ended Dec. 28, while average prices jumped 3%.

PepsiCo ( PEP ) also promised heavy investments into overhauling

its existing products and introducing new items to spur slowing

demand from lower-income customers.

The company expects a low-single digit increase for fiscal

2025 core earnings per share, compared with analysts' estimates

of a 4.73% rise to $8.53 per share, according to data compiled

by LSEG.

Its quarterly net revenue fell 0.2% to $27.78 billion,

missing estimates of $27.89 billion. On an adjusted basis,

PepsiCo ( PEP ) earned $1.96 per share, above expectations of $1.94.