PepsiCo beats Q2 revenue estimates, shares gain 2% in pre-market

PepsiCo (PEP) reported second-quarter revenue that topped Wall Street expectations, sending shares up about 2% in pre-market trading on Wednesday.

"The results reflect continued momentum across our categories, even as consumers remain selective in their spending," Chief Executive Officer Ramon Laguarta said in a statement.

Analysts on average had expected PepsiCo to report revenue of $23.95 billion and earnings per share of $2.21, according to estimates compiled by Bloomberg. The company did not immediately disclose its exact revenue or EPS figures alongside the preliminary beat announcement. Evercore ISI analyst Robert Ottenstein had forecast EPS of $2.18 and flagged risk from weaker consumer demand heading into the print.

The Purchase, New York-based snack and beverage giant posted revenue growth of 5.6% in the prior quarter, with Q1 revenue reaching $19.44 billion, up 8.5% year on year. The company has faced headwinds from inflation-weary shoppers trading down to private-label alternatives, a trend that has pressured volumes across the consumer staples sector.

PepsiCo shares have risen 3.2% over the past month, trailing the broader consumer staples segment, which gained 8.9% on average during the same period. The stock traded at about $145.21 ahead of the release, with the average analyst price target standing at $168.50, implying roughly 16% upside.

The revenue beat signals that PepsiCo's pricing strategy and product mix are holding up better than feared in a challenging consumer environment. Investors will watch the company's full earnings release on Thursday morning for updated guidance and segment-level detail on its Frito-Lay North America and beverage divisions.

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