​PepsiCo's stock has experienced a notable decline over the past several months. Why?

PepsiCo's stock has experienced a notable decline over the past several months, primarily due to a combination of macroeconomic challenges, shifting consumer behaviors, and company-specific issues.​

Key Factors Behind PepsiCo's Stock Decline

1. Impact of Tariffs and Rising Costs
   
   Recent U.S. trade policies, including a 25% tariff on imported aluminum and a 10% tariff on concentrate produced in Ireland, have increased PepsiCo's production costs. These tariffs have pressured profit margins and led the company to revise its full-year earnings forecast downward, now expecting flat adjusted earnings per share compared to the previous year's $8.16.

2. Weakened Consumer Demand
   
   After multiple price hikes over the past two years to offset rising production costs, PepsiCo is now facing reduced consumer demand, especially in the U.S. Consumers are becoming more price-sensitive, leading to a slowdown in sales of beverages and snacks .

3. Product Recalls and Operational Challenges
   
   In 2024, PepsiCo faced product recalls, particularly in its Quaker Foods division, due to Salmonella contamination. These recalls led to factory shutdowns and negatively impacted sales .

4. Plant Closures and Job Cuts
   
   The company announced the closure of four U.S. bottling plants and the layoff of approximately 400 workers as part of cost-reduction efforts. These measures reflect broader operational challenges and have contributed to investor concerns .

5. Currency Fluctuations and Global Economic Uncertainty
   
   A strong U.S. dollar has negatively impacted PepsiCo's revenue in foreign markets, particularly in Europe and Latin America. Additionally, global economic uncertainties and trade tensions have further pressured the company's international sales.

Current Stock Performance

As of April 25, 2025, PepsiCo's stock is trading at $133.73, reflecting a decline of approximately 24% for the last 12 months. The stock's performance mirrors the company's ongoing challenges in navigating a complex economic landscape.​

In summary, PepsiCo's stock decline is attributed to a confluence of increased production costs due to tariffs, decreased consumer demand following price hikes, operational setbacks from product recalls, strategic cost-cutting measures, and unfavorable currency exchange rates. These factors collectively have led to reduced investor confidence and a downward trend in the company's stock price.