PepsiCo Reports Third-Quarter 2023 Results; Raises Full-Year EPS Guidance And Provides Initial 2024 Outlook

PepsiCo Reports Third-Quarter 2023 Results; Raises Full-Year EPS Guidance And Provides Initial 2024 Outlook

Reported (GAAP) Third-Quarter and Year-to-Date 2023 Results

PURCHASE, N.Y. - October 10, 2023 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the third quarter 2023.

"We are pleased with our performance as our businesses and associates displayed tremendous agility and resilience across geographies and categories in an evolving and dynamic environment. Given the strength of our businesses and categories and a continued focus on advancing our holistic cost management initiatives, we now expect our full-year 2023 core constant currency EPS to increase 13 percent (previously 12 percent) and continue to expect our full-year 2023 organic revenue to increase 10 percent," said Chairman and CEO Ramon Laguarta .

Laguarta continued, "We believe that our businesses can continue to perform well in the coming years with category growth normalizing, as we have made numerous investments in our brands, manufacturing capacity, go-to-market systems, supply chain, technology, and people, to execute against our strategic framework and modernize our company. Therefore, we expect our full-year 2024 organic revenue and core constant currency EPS growth to be towards the upper end of our long-term targets as we advance towards our vision to become the global leader in beverages and convenient foods by winning with pep+."

• Please refer to the Glossary for the definitions of non-GAAP financial measures, including "Organic revenue growth," "Core" and "Constant currency," and to "Guidance and Outlook" for additional information regarding PepsiCo's full-year 2023 financial guidance, full-year 2024 financial guidance and long-term financial performance targets. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market net impacts. Please refer to PepsiCo's Quarterly Report on Form 10-Q for the 12 and 36 weeks ended September 9, 2023 (Q3 2023 Form 10-Q) filed with the Securities and Exchange Commission (SEC) for additional information regarding PepsiCo's financial results.

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Operating Profit and EPS

1. Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue growth disclosed in the Organic Revenue Growth Rates tables on page A-8, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between bottler case sales (BCS) and concentrate shipments and equivalents (CSE). We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic revenue growth," "Core" and "Constant currency."

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Operating Profit and EPS

1. Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue growth disclosed in the Organic Revenue Growth Rates tables on page A-8, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

n/m - Not meaningful due to the impact of impairment and other charges in 2022.

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic revenue growth," "Core" and "Constant currency."

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Guidance and Outlook

The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.

For fiscal year 2023, the Company now expects to deliver 13 percent core constant currency EPS growth (previously 12 percent).

Consistent with its previous guidance for 2023, the Company continues to expect:

• 10 percent organic revenue growth;
• A core annual effective tax rate of 20 percent; and
• Total cash returns to shareholders of approximately $7.7 billion , comprised of dividends of $6.7 billion and share repurchases of $1.0 billion .

In addition, the Company continues to expect an approximate 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates.

This assumption and the guidance above imply 2023 core EPS of $7.54 (previously $7.47 ), an 11 percent increase (previously 10 percent) compared to 2022 core EPS of $6.79 .

For fiscal year 2024, we expect to deliver results towards the upper end of our long-term target ranges for both organic revenue and core constant currency EPS growth. Our long-term target ranges for both organic revenue growth (4 to 6 percent increase) and core constant currency EPS growth (high-single- digit percentage increase) remain unchanged.

Prepared Management Remarks and Live Question and Answer Webcast

At approximately 6:30 a.m. (Eastetime) on October 10, 2023 , the Company will post prepared management remarks (in pdf format) of its third quarter 2023 results and business update, including its outlook for 2023, at www.pepsico.com/investors. At 8:15 a.m. (Eastetime) on October 10, 2023 , the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company's website at www.pepsico.com/investors.

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PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Statement of Income (in millions except per share amounts, unaudited)

1. The increase in selling, general and administrative expenses for the 12 and 36 weeks ended September 9, 2023 , as compared to the 12 and 36 weeks ended September 3, 2022 , primarily reflects higher selling and distribution costs as well as higher advertising and marketing expenses.
2. In the 36 weeks ended September 3, 2022 , we sold our Tropicana, Naked and other select juice brands to PAI Partners for $3.5 billion in cash and a 39% noncontrolling interest in a joint venture, Tropicana Brands Group (TBG), operating across North America and Europe (Juice Transaction).
3. In the 36 weeks ended September 3, 2022 , we recorded pre-tax impairment charges of $1.6 billion primarily related to the decrease in fair value of our indefinite-lived intangible assets as a result of the Russia - Ukraine conflict.

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