PepsiCo reported quite a bit better figures than what the market consensus expected for the first quarter. The soft drinks and snacks giant delivered $1.61 of EPS (equity per share) in the Q1 2024 against $1.52 in Wall Street analyst pool estimates. Despite this was less than 80% of a $2.04 average income during the previous three quarters of 2023, the situation with a poorer start from January to March is very ordinary. It is repeated year after year. Instead, the focus is usually shifted to a year-on-year comparison, particularly with Q1 2023 and Q1 2022 results, and such a fair comparative study gives an unbiased observer a 7.3% and a 24.8% growth from reference plans, which were calculated one and two years ago, respectively.

The company's sales amounted to $18.25 billion vs $17.85 in Q1 2023 and $16.2 in Q1 2022, a 41.7% above the pre-pandemic record of $12.88 for the first quarters. In fact, Q1 2024 was the best in any financial aspect, including profit margins, among all initial quarters ever for the business of PepsiCo. Because of smart regional diversification, international demand for most of its sodas and snacks (Cheetos, Doritos etc), including Europe, Asia Pacific and China, served as a reliable driver for growth even though a slowdown in North America took place. Globally distributed business is now about 40% from the whole revenue of PepsiCo. New items like its Celsius energy drink flavored and Quaker instant oats help further global expansion, while Quaker Foods sales in North America lost 24% due to a sudden product recalling there because of a potential salmonella contamination risk. The company's financials are moving forward showing a very good pace, despite all these odds and temporary headwinds.

"We've had three years of ... massive consumer inflation and that has to be absorbed and I think the cumulative impact of that puts a bit of strain on the consumer. But we expect that to abate as time goes on," PepsiCo CFO Jamie Caulfield commented on the results. PepsiCo's organic volume sold is 2% lower YoY, against a higher 4% drop in Q4 2023 vs Q4 2022, yet the company got better income despite a rather reasonable price increase of nearly 5% in Q1 2024 vs Q1 2023. The way how its management coped with the inflation pressure challenge, improving efficiency and return by successfully raising selling prices and competitiveness in its product line, deserves respect at least, if not immediate appreciation of the crowd.

Based on strong and growing fundamentals, an actual 2.25% decrease in PepsiCo share price seems not absolutely logical in the first five hours after the release. The only normal explanation for this effect could lie in reaching technically a 7-month ceiling after the price climbed by almost 6% already in the previous week. Combined with edging higher two slowly in terms of the S&P 500 broad market index recovery after last Friday's nervous stress and expectations of more clear overall direction from the top giants like Meta, Microsoft, Google, Apple and Amazon, the delay in further growth of successfully reported consumer businesses like PepsiCo could be justified but temporary. If so, we consider that more jumps to retest widely expected target prices within the range of $185-$195 are only a matter of time.