The quarterly earnings report season continues this week with Pepsi (PEP). Amid falling demand for its Lay's chips, sugary drinks, and other snacks, the firm will post Q3 results on Thursday before markets open.
In Q2, Pepsi reported a 6.4% Y/Y revenue increase, to $24.18 billion. Its core EPS rose by 4% to $2.20. Pepsi is reversing its market share growth strategy. Instead of cutting prices, it will hike prices for brands like Doritos and Ruffles. Profit margin expansion might falter if consumers scoff at the higher prices.
Novo Nordisk’s (NVO) popular Ozempic drug for obesity also took away demand for unhealthy snacks and drinks. Neither Pepsi nor Coca-Cola (KO) may adjust its product mix to address that headwind.
Delta Airlines (DAL) bounced back, gaining $10 in the last month to close at $84.09. In Q2, revenue rose by 18.7% Y/Y to $19.76 billion. In Q3, high jet fuel prices might have hurt revenue and profits.
In the apparel sector, Levi Strauss (LEVI) shares slumped from a $25.70 high in the summer to close last week below $20. In Q2, its Beyond Yoga revenue rose by 23% Y/Y. Expect revenue growth of 4% to 5% in the upcoming Q3 report. LEVI stock volatility might move GAP (GAP), Nike (NKE), and Lululemon (LULU).
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