10:15 AM EDT, 07/11/2024 (MT Newswires) -- PepsiCo ( PEP ) tempered its fiscal 2024 organic revenue expectations as second-quarter sales missed market estimates driven by a double-digit decline in the Quaker Foods business in North America.

For fiscal 2024, the company now anticipates organic revenue growth of "approximately" 4%, compared with its prior outlook of at least 4%. The stock was down 1.5% in Thursday trade.

"When we're saying at least 4%, we were talking more about around 5% in our minds," Chief Executive Ramon Laguarta said on a conference call, according to a Capital IQ transcript. "Now we're talking around 4(%) ... and it's related to specifically the consumer in the US."

Consumers in the US are "telling us that in particular parts of our portfolio, they want more value to stay with our brands," Laguarta told analysts. PepsiCo ( PEP ) continues to project full-year adjusted earnings per share of at least $8.15. The Street is looking for normalized EPS of $8.16.

For the three months through June 15, adjusted EPS came in at $2.28, up from $2.09 the year before and topping the Capital IQ-polled consensus of $2.16. Revenue edged 0.8% higher to $22.5 billion, but fell short of the Street's view for $22.59 billion.

Overall net pricing had a positive impact of 5% on the topline, while consolidated organic volume slipped 3%. Volume decreased 2% in the company's convenient food business, while it remained flat in beverages.

PepsiCo ( PEP ) faced tough net revenue growth comparisons year over year, "subdued category performance" within North America convenient foods and impacts linked to certain product recalls at Quaker Foods, Laguarta said in a statement.

In North America, Quaker Foods' reported revenue declined 18%. The company is making progress in resuming production of items affected by the recalls and expects the revenue impact to moderate as the year progresses, Laguarta and Chief Financial Officer Jamie Caulfield said in prepared remarks published on the company's website.

Revenue in the beverages unit ticked up 1% as Pepsi and Mountain Dew logged sequential gains. The Frito-Lay snack division, which includes trademark names such as Doritos, Cheetos and Lays, slipped 0.5%.

"For the balance of the year, we will further elevate and accelerate our productivity initiatives and make disciplined commercial investments in the marketplace to stimulate growth," Laguarta said in a statement. "These investments will focus on surgically providing optimal value propositions within certain portions of our North America convenient foods portfolio, amplifying our advertising and marketing initiatives and leveraging our go-to-market distribution capabilities."

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