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PepsiCo Stock Slumps After Announcing Plant Closures and Job Cuts
PepsiCo (NASDAQ:PEP) is a New York-based company that is engaged in the manufacture, marketing, distribution, and sale of various beverages and convenient foods around the world. Its shares have dropped 2.2% month-over-month as of close on October 30, 2024. Meanwhile, the stock has dropped 3.9% in the year-to-date period.
This week, the company announced that it planned to shutter four bottling plants that are based in the United States. Moreover, it would proceed to lay off nearly 400 workers as part of its efforts to reduce operational costs. Its Chicago bottling plan is the only one that will fully close, resulting in over 130 job losses. Meanwhile, sales, delivery, and warehouse functions will continue at its other three plant locations.
Investors got to see PepsiCo’s third quarter (Q3) fiscal 2024 earnings earlier this month. In Q3 2024, the company reported a 0.6% drop in net revenue performance. Meanwhile, earnings per share (EPS) and foreign exchange impact on EPS decline 5% and 2%, respectively, compared to the previous year. Ultimately, the company moved to lower its sales forecast for the fiscal year as consumers in the U.S., China, and internationally have pulled back on buying its drinks and snacks with years of price increase acting as a headwind.
Shares of PepsiCo currently possess a price-to-earnings ratio of 24. Despite the gloomy news, its stock is still trading in solid value territory. Moreover, PepsiCo offers a quarterly dividend of $1.35 per share. That represents a 3.26% yield at the time of this writing.
