PepsiCo Inc ( PEP ) shares are trading lower in premarket on Tuesday after the company reported worse-than-expected fourth-quarter revenue.

The company reported a fourth-quarter sales decline of 0.2% year-on-year to $27.78 billion, missing the analyst consensus estimate of $27.89 billion.

Net revenue from Frito-Lay North America decreased 2% Y/Y, Quaker Foods North America dropped 2%, and PepsiCo Beverages North America remained flat.

Latin America sales slumped 7% Y/Y, and Europe sales rose 6%. Gross profit decreased 1% Y/Y to $14.6 billion, and the margin contracted 41 basis points Y/Y to 52.6%.

Operating margin expanded by 206 basis points to 8.1%, and operating income for the quarter increased 33.6% to $2.25 billion.

The company held $8.5 billion in cash and equivalents as of December 28. Operating cash flow for the twelve months totaled $12.5 billion.

Adjusted EPS of $1.96 beat the consensus estimate of $1.94.

Pepsi announced a 5% increase in its annualized dividend to $5.69 per share from $5.42 per share, effective with the dividend expected to be paid in June 2025.

Chairman and CEO Ramon Laguarta, said “Our businesses remained resilient in 2024, despite subdued category performance trends in North America, the continued impacts related to a recall in our Quaker Foods North America division and business disruptions due to geopolitical tensions in certain international markets.”

Outlook: PepsiCo ( PEP ) expects low-single-digit increase in organic revenue for FY25 and a mid-single-digit increase in core constant currency EPS.

PepsiCo ( PEP ) sees a core annual effective tax rate of approximately 20%.

The expects total cash returns to shareholders to be approximately $8.6 billion, consisting of dividends of $7.6 billion and share repurchases of $1.0 billion.

The company also expects a foreign exchange translation headwind of approximately 3% to negatively impact reported net revenue and core EPS growth.

Price Action: PEP shares are trading lower by 2.17% at $147.01 in premarket at the last check Tuesday.