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PepsiCo beats Q1 revenue forecasts as price increases moderate

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PepsiCo beats Q1 revenue forecasts as price increases moderate
News

News

PepsiCo beats Q1 revenue forecasts as price increases moderate

2024-04-23 21:57 Last Updated At:22:00

PepsiCo reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.

The Purchase, New York-based company said revenue rose 2% to $18.3 billion for the January-April period. That was higher than the $18 billion Wall Street forecast, according to analysts polled by FactSet.

Pepsi reaffirmed its financial guidance for 2024, including organic revenue growth of 4%. The company has said it expects to return to more normal rates of growth this year after several years of inflation-driven price increases.

That may have disappointed investors who have grown used to stronger growth at PepsiCo. Last year organic revenue grew 9.5%, for example. PepsiCo's shares fell more than 2.5% in morning trading Tuesday.

In North America Frito-Lay revenue rose 2% while Pepsi beverage sales were up 1%. Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars and snacks because of potential contamination with salmonella. Quaker Foods sales dropped 24% during the quarter.

But the company saw 11% sales growth in Asia Pacific and 10% sales growth in Europe.

PepsiCo Chairman and CEO Ramon Laguarta said the company is optimistic that consumer demand will continue to rise this year in the U.S. and elsewhere.

“The consumer, globally, we think is very resilient,” Laguarta said during a conference call with investors. “It's basically supported by two facts: very low unemployment or quite low unemployment globally and wages growing at a good pace in the majority of the countries where we participate.”

In Europe, sales were driven by demand in Eastern Europe, Laguarta said. In Western Europe, consumers saw fewer PepsiCo snacks and drinks on grocery shelves during the quarter. Carrefour, one of Europe’s largest supermarket chains, announced in January that it was pulling PepsiCo products from stores in France, Belgium, Spain and Italy due to unacceptable price increases. The two companies resolved their pricing dispute and Carrefour began restocking PepsiCo products in early April.

The company said it also saw double-digit organic revenue growth in Mexico, Brazil, Egypt, Pakistan, China and Australia.

But Laguarta added a note of caution. Consumer spending in China remains cautious, he said, and PepsiCo is also keeping a close eye on lower-income consumers in the U.S., who are buying fewer snacks or switching to store brands in the face of higher prices.

“The lower-income consumer in the U.S. is stretched,” he said. “That’s a consumer that we are emphasizing in our commercial programs and we are learning how best to keep that consumer in our categories.”

PepsiCo has leaned heavily into price increases over the past two years to combat higher ingredient costs. The fourth quarter of 2023 was the company’s eighth straight quarter of double-digit percentage price increases.

Those increases moderated in the first quarter. PepsiCo said net pricing was up 5% globally during the quarter, while volumes fell 2%. PepsiCo has said some of that volume decline is strategic. The company has been shrinking package sizes to meet consumer demand for convenience and portion control.

PepsiCo said its net earnings rose 5.6% to $2 billion in the first quarter. Excluding special items, the company earned $1.61 per share. That beat Wall Street’s forecast of $1.52.

FILE - Boxes of Pepsi are displayed in a grocery store, Ill., Thursday, Feb. 10, 2022. PepsiCo reports earnings on Tuesday, April 23, 2024. (AP Photo/Nam Y. Huh)

FILE - Boxes of Pepsi are displayed in a grocery store, Ill., Thursday, Feb. 10, 2022. PepsiCo reports earnings on Tuesday, April 23, 2024. (AP Photo/Nam Y. Huh)

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Climbing limits are being set on Mount Fuji to fight crowds and littering

2024-05-21 14:41 Last Updated At:14:50

TOKYO (AP) — Those who want to climb one of the most popular trails on Japan's iconic Mount Fuji will have to book a slot and pay a fee as crowds, littering and climbers who try to rush too fast to the summit cause safety and conservation concerns at the picturesque stratovolcano.

The new rules for the climbing season, starting July 1 to Sept. 10, apply for those hiking the Yoshida Trail on the Yamanashi side of the 3,776 meter- (nearly 12,300 feet-) high mountain that was designated a UNESCO World Cultural Heritage site in 2013.

Only 4,000 climbers will be allowed to enter the trail per day for a hiking fee of 2,000 yen (about $18). Of those slots, 3,000 will be available for online booking and the remaining 1,000 can be booked in person on the day of the climb, Yamanashi prefecture said in a statement via the Foreign Press Center of Japan on Monday. Hikers also have an option of donating an additional 1,000 yen (about $9) for conservation.

Climbers can book their slots via the Mount Fuji Climbing website, which is jointly run by the Environment Ministry and the mountain's two home prefectures, Yamanashi and Shizuoka.

Mount Fuji is divided into 10 stations, and there are four “5th stations” halfway up the mountain from where the Yoshida, Fujinomiya, Subashiri, and Gotemba trails start to the top.

Under the new system, climbers must choose between a day hike or an overnight stay at the several available huts along the trail. The day of their climb, they are given a QR code to be scanned at the 5th station. Those who have not booked an overnight hut will be sent back down and not allowed to climb between 4 p.m. and 3 a.m., mainly to stop “bullet climbing,” or rushing to the summit without adequate rest, which authorities are worried puts lives at risk.

A symbol of Japan, the mountain called “Fujisan” used to be a place of pilgrimage. Today, it especially attracts hikers who climb to the summit to see the sunrise. But the tons of trash that's left behind, including plastic bottles, food and even clothes, have become a major concern.

In a statement, Yamanashi Gov. Kotaro Nagasaki thanked people for their understanding and cooperation in helping conserve Mount Fuji.

Shizuoka prefecture, southwest of Mount Fuji, where climbers can also access the mountain, has sought a voluntary 1,000-yen ($6.40) fee per climber since 2014 and is considering additional ways to balance tourism and environmental protection.

The number of Mount Fuji climbers during the season in 2023 totaled 221,322, according to the Environment Ministry. That is close to the pre-pandemic level and officials expect more visitors this year.

Just a few weeks ago, a town in Shizuoka began setting up a huge black screen on a sidewalk to block a view of Mount Fuji because tourists were crowding into the area to take photos with the mountain as a backdrop to a convenience store, a social media phenomenon known as “Mount Fuji Lawson” that has disrupted business, traffic and local life.

Overtourism has also become a growing issue at other popular tourist destinations such as Kyoto and Kamakura as foreign visitors have flocked to Japan in droves since the coronavirus pandemic restrictions were lifted, in part due to the weaker yen.

Last year, Japan had more than 25 million visitors, and the figures in 2024 are expected to surpass nearly 32 million, a record from 2019, according to the Japan National Tourism Organization.

Workers set up a huge black screen on a stretch of sidewalk at Fujikawaguchiko town, Yamanashi prefecture, central Japan Tuesday, May 21, 2024. Just a few weeks ago, the town began setting up a huge black screen to block a view of Mount Fuji because tourists were crowding into the area to take photos with the mountain as a backdrop to a convenience store, a social media phenomenon known as “Mount Fuji Lawson” that has disrupted business, traffic and local life. (Kyodo News via AP)

Workers set up a huge black screen on a stretch of sidewalk at Fujikawaguchiko town, Yamanashi prefecture, central Japan Tuesday, May 21, 2024. Just a few weeks ago, the town began setting up a huge black screen to block a view of Mount Fuji because tourists were crowding into the area to take photos with the mountain as a backdrop to a convenience store, a social media phenomenon known as “Mount Fuji Lawson” that has disrupted business, traffic and local life. (Kyodo News via AP)

FILE - The shadow of Mount Fuji is casted on clouds hanging below the summit, Tuesday, Aug. 27, 2019, in Japan. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk. (AP Photo/Jae C. Hong, File)

FILE - The shadow of Mount Fuji is casted on clouds hanging below the summit, Tuesday, Aug. 27, 2019, in Japan. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk. (AP Photo/Jae C. Hong, File)

FILE -A group of hikers climb to the top of Mount Fuji just before sunrise as clouds hang below the summit Tuesday, Aug. 27, 2019, in Japan. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk.(AP Photo/Jae C. Hong, File)

FILE -A group of hikers climb to the top of Mount Fuji just before sunrise as clouds hang below the summit Tuesday, Aug. 27, 2019, in Japan. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk.(AP Photo/Jae C. Hong, File)

FILE - In this Dec. 8, 2010 file photo, snow-covered Mount Fuji, Japan's highest peak at 3,776-meters tall (12,385 feet), is seen from an airplane window. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk. (AP Photo/Itsuo Inouye, File)

FILE - In this Dec. 8, 2010 file photo, snow-covered Mount Fuji, Japan's highest peak at 3,776-meters tall (12,385 feet), is seen from an airplane window. Those who want to climb one of the most popular trails of the iconic Japanese Mount Fuji will now have to reserve ahead and pay a fee as the picturesque stratovolcano struggles with overtourism, littering and those who attempt rushed “bullet climbing,” putting lives at risk. (AP Photo/Itsuo Inouye, File)

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