PepsiCo, Inc. (PEP) released its third quarter earnings report on Tuesday, October 8. Despite the beverage and snack manufacturer reporting decreased revenue and income for the quarter, shares remained flat in early trading following the earnings report.

The company reported quarterly revenue of $23.32 billion, below analysts’ estimates of $23.76 billion. This was down from $23.45 billion in revenue during the same quarter last year.

“Our businesses remained resilient in the third quarter, despite subdued category performance trends in North America, the continued impacts related to certain recalls at Quaker Foods North America and business disruptions due to rising geopolitical tensions in certain international markets,” said PepsiCo CEO, Ramon Laguarta. “Strong cost controls aided our profitability, as we made incremental investments to improve our marketplace competitiveness.”

PepsiCo reported net income of $2.93 billion for the quarter, or $2.13 per adjusted share. This was down from net income of $3.09 billion, or $2.24 per adjusted share in the same period a year ago.

The company’s PepsiCo Beverages North America segment revenue increased to $7.18 billion, up from $7.16 billion reported in the year prior. The Frito-Lay North America segment decreased to $5.89 billion, from $5.95 billion at the same time last year. The Quaker Foods North America segment generated revenue of $648 million for the quarter, a decrease from $747 million in revenue one year ago. PepsiCo reaffirmed its guidance for fiscal 2024, with the exception of its organic revenue segment. The company expects a low-single-digit increase in organic revenue and plans to return a total cash return of $8.2 billion to shareholders, including $7.2 billion through the payment of dividends and $1.0 billion in share repurchases.

PepsiCo, Inc. (PEP) shares ended the week at $174.81, up 4.2% for the week.

Helen of Troy Posts Earnings

Helen of Troy Limited (HELE) reported its second quarter earnings on Wednesday, October 9. The company reported better-than-expected earnings, causing its stock to rise 12% after the release of the report.

Helen of Troy reported sales of $474.22 million in the second quarter. This was a decline from $491.56 million reported at this time last year, but above analysts’ expectations of $458.24 million.

“We are pleased to report second quarter results that were above expectations and we are reaffirming our annual outlook for net sales, adjusted EPS, and adjusted EBITDA,” said Helen of Troy CEO, Noel M. Geoffroy. “I am proud of our team for their dedication and focus and remain confident we are on the right path to long-term profitable growth and increased value for all Helen of Troy stakeholders.”

Helen of Troy posted net income of $17.01 million or $0.74 per diluted share. This was down from net income of $27.38 million or $1.14 per diluted share at this time last year.

The parent company of brands such as Hydro Flask, OXO, Braun and Honeywell reported a 0.8% increase in their Home & Outdoor revenue to $241.94 million. This increase was primarily driven by an increase in sales in the insulated beverageware category, higher international sales driven by new and expanded retailer distribution and expanded retailer distribution in the home category. The company saw a 7.7% decrease in revenue for their Beauty & Wellness segment to $232.3 million. The company attributed the decrease in revenues to reduced consumer demand for hair appliances, humidifiers and water filtration products. The company maintained its fiscal 2025 annual outlook and expects net sales to be in the range of $1.89 billion to $1.94 billion, a reduction from the previous forecast.

Helen of Troy Limited (HELE) shares ended the week at $71.54, up 14.7% for the week.

Delta Air Lines’ Earnings Take Off

Delta Air Lines (DAL) reported third quarter earnings on Thursday, October 10. The Atlanta-based airline’s stock fell almost 2% despite reporting quarterly revenue that exceeded expectations.

The company posted revenues of $15.68 billion for the quarter ended September 2024. This is up from $15.49 billion in revenue during the third quarter of 2023 and exceeded analysts’ estimates of $15.39 billion.

“Thanks to the exceptional work of the entire Delta team, we continue to lead the industry operationally and financially, with a double-digit operating margin and nearly $3 billion of free cash flow generation year-to-date,” said Delta’s CEO, Ed Bastian. "With an improving industry backdrop and strong demand for travel on Delta, we are positioned to finish the year strong.”

Delta reported net income of $1.27 billion or $1.97 per adjusted share. This was up from net income of $1.11 billion or $1.72 per adjusted share in the same quarter last year.

Delta Air Line’s third-quarter earnings were marked by an ease in travel demand. Domestic travel revenue remained relatively unchanged at $8.65 billion during the quarter. International passenger revenue remained unchanged as the Atlantic and Latin America segments decreased by 3% and 1%, respectively, offset by a 16% increase in the Pacific. Delta’s total passenger revenue was $13.11 billion, remaining flat from the prior year. Even with domestic and international travel demands relaxing, the company upheld its fourth quarter projection for total revenue to be up 2% to 4%.

Delta Air Lines (DAL) shares ended the week at $51.33, up 2.1% for the week.

The Dow started the week of 10/7 at 42,290 and closed at 42,864 on 10/11. The S&P 500 started the week at 5,738 and closed at 5,815. The NASDAQ started the week at 18,080 and closed at 18,343.

U.S. Treasury yields trended higher mid-week as investors digested the latest economic data reflecting higher-than-expected inflation for consumer goods. Yields rose at the end of the week as the jobless claims report showed a surge in claims in the aftermath of Hurricane Helene and furloughs at Boeing.

On Wednesday, the U.S. Bureau of Labor Statistics announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, increased 0.2% in September, above economists’ forecast of 0.1%. The CPI year-over-year rose to 2.4%, marking the smallest increase since February 2021, but slightly above economists’ projections of 2.3%.

“September’s CPI report has good news and bad news for the Fed,” said chief economist at Raymond James, Eugenio Aleman. “The good news is that shelter costs slowed down to 0.2%, month-on-month, and 4.9%, year-over-year. However, it also showed that there are still plenty of upside risks for inflation going forward.”

The benchmark 10-year Treasury note yield opened the week of October 7 at 3.96% and traded as high as 4.12% on Thursday. The 30-year Treasury bond opened the week at 4.25% and traded as high as 4.41% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 33,000 to 258,000 for the week ending October 3. This marks the highest number of unemployment claims since August 2023 and exceeded analysts’ expectations of 229,000 claims. Continuing unemployment claims increased by 42,000 to 1.86 million.

“Claims will likely continue to be elevated in states affected by Helene and Hurricane Milton as well as the Boeing strike until it is resolved,” said lead U.S. economist of Oxford Economics, Nancy Vanden Houten. “We think, though, that the Fed will view these impacts as temporary and still expect it to lower rates by (25 basis points) at the November meeting.”

The 10-year Treasury note yield finished the week of 10/7 at 4.11%, while the 30-year Treasury note yield finished the week at 4.41%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, October 10. The survey showed the 30-year mortgage rate experienced its largest one-week increase since April.

This week, the 30-year fixed rate mortgage averaged 6.32%, up from last week’s average of 6.12%. Last year at this time, the 30-year fixed rate mortgage averaged 7.57%.

The 15-year fixed rate mortgage averaged 5.41% this week, up from last week’s 5.25%. During the same week last year, the 15-year fixed rate mortgage averaged 6.89%.

“Following the release of a stronger-than-expected September jobs report, the 30-year fixed rate mortgage saw the largest one-week increase since April,” said Freddie Mac’s Chief Economist, Sam Khater. “However, we should remember that the rise in rates is largely due to shifts in expectations and not the underlying economy, which has been strong for most of the year. Although higher rates make affordability more challenging, it shows the economic strength that should continue to support the recovery of the housing market.”

Based on published national averages, the savings rate was 0.46% as of 9/16. The one-year CD averaged 1.88%.

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