Pepsi lowers earnings expectations

No one enjoys a soda that’s gone flat. Investors probably didn’t like the news that PepsiCo expects its earnings to remain flat this year, either. Tariffs and consumer spending are to blame for shaking up the can that is Pepsi’s 2025 earnings, according to company leaders.

“Given expected higher supply chain costs related to tariffs, elevated macroeconomic volatility, and a subdued consumer backdrop,” the beveragemaker now predicts earnings per share will come out “approximately even with the prior year” as opposed to its previously predicted single-digit YoY growth, according to an earnings release.

CFO Jamie Caulfield added during the company’s earnings call that a third factor, “subdued performance” from its Frito’s brand, also played a role in the revised 2025 guidance.

Many may feel that Pepsi’s worsening expectations were predictable and expected, given the plethora of economic warning signs. Consumer confidence fell for a fourth straight month in April, the IMF recently downgraded its 2025 global growth expectations, and a new analysis from PwC found the Trump administration’s tariffs could cost US companies nearly a trillion dollars annually.

“We’ve factored in what we know about tariffs today and we factored in mitigation plans, which we continue to work,” Caulfield said of the ongoing trade war. “Some of those we’ll be able to execute more quickly. Some of those will take more time to execute.”