July 11 (Reuters) - PepsiCo ( PEP ) missed expectations

for second-quarter revenue on Thursday as a series of price

hikes and competition from private-label brands slowed sales of

its snacks and soda mainly in the United States, its largest

market.

Analysts have said that product prices, which are starting

to normalize almost after two years of multiple hikes, are still

higher than the pre-pandemic levels, giving packaged-food

companies such as PepsiCo ( PEP ) little room to raise prices as volumes

shrink.

PepsiCo ( PEP ) raised average prices on its products by 5% for the

quarter ended June 15, in line with the first quarter. However,

overall organic volumes slipped 3% in the reported quarter.

Company executives said year-to-date performance across

many food categories, including snacks, has been subdued and

consumers have become more value-conscious with spending and

preferences across brands, packages and channels.

Frito-Lay North America, which sells Lay's and Doritos

chips, contributed about 27% to PepsiCo's ( PEP ) total revenue in

fiscal 2023 and is the company's second-largest business after

the North America beverages unit, which accounted for about 30%

of overall sales.

Shares of the company fell 2.2% in premarket trading

after PepsiCo ( PEP ) also said it expected fiscal 2024 organic revenue

to be about 4%, compared with prior expectations of at least 4%.

"They are on the lower side of projections here, they're

seeing the weakness here and we've been talking about that for

several quarters now and that seems to be ongoing, especially in

the lower-income consumer, which is no surprise," said Don

Nesbitt, senior portfolio manager at F/m Investments.

Still, easing production and other expenses from pandemic

peaks, along with the impact of price hikes, helped PepsiCo ( PEP ) post

an adjusted profit of $2.28 per share, beating LSEG estimates of

$2.16.

The company's revenue rose 0.8% to $22.50 billion in the

quarter, while analysts had estimated $22.57 billion.