Snacks fail to lure US shoppers

More worried about their jobs and finances, Americans cut back on snacks

- JULIE CRESWELL DANIELLE KAYE

Consumers, worried about the economy, are pulling back on their spending, and that anxiety is translating into lower sales and profits for some of the United States' largest consumer-oriented companies.

On Thursday, PepsiCo Inc cut its full-year guidance outlook, citing a reduction in consumer spending as well as the impact the beverage and snacks company is feeling from increased global tariffs.

“Relative to where we were three months ago, we probably aren't feeling as good about the consumer now,” Jamie Caulfield, chief financial officer of PepsiCo, told Wall Street analysts and investors on an earnings call Thursday morning.

The company, which manufactures Pepsi and Gatorade drinks as well as popular snacks such as Doritos and Cheetos, cut its profit forecast for the full year to flat from its earlier guidance that expected earnings growth to be in the mid-single digits. It reported a decline of 1.8% in revenue, to $17.9 billion, for the quarter ending March 22, and a drop of 10% in net income, to $1.8 billion, from the same period a year ago.

PepsiCo’s stock fell more than 4%, to $136, by early afternoon Thursday.

Comments made on PepsiCo's earnings call echoed what executives at other consumer companies have said in recent days about how apprehension in the global economy was key to consumers spending less.

The pullback has started to weigh on some companies’ revenues and dampen their outlook for the coming months, especially as they try to calculate the costs they'll incur from the Trump administration’s new or increased tariffs on imported goods.