PepsiCo Inc.  (PEP - Get Report) has given investors a tough new choice -- continue to focus on a good earnings story or become a little worried on revenue trends in one of its key businesses. 

The beverage and snacks giant reported third-quarter earnings of $1.48 a share, beating Wall Street forecasts for $1.43, on Wednesday, Oct. 4. Profit was fueled by growth in Frito Lay North America and Quaker Foods North America as the company continues to push toward healthier foods. PepsiCo also benefited from a continued focus on cost cuts. 

But the company was forced to slash its full-year organic revenue growth outlook to about 2.3% from at least 3% previously in part due to a challenging third quarter in its core beverage business. Third-quarter sales in PepsiCo's North American beverage were unchanged from. the prior year, while operating profit fell 2%.

Pepsi shares were up slightly on Wednesday. 

"Overall, our businesses performed well in the third quarter in what continues to be a challenging environment," said PepsiCo Chair and CEO Indra Nooyi. "Each of our operating sectors delivered results in line with or ahead of our expectations, with the exception of North America Beverages where revenues declined following two consecutive years of very strong third-quarter growth."

There's "no question about it" that Pepsi undeperformed this quarter, Nooyi said on a call with analysts, pointing to Gatorade, which accounts for 20% of third quarter volumes. Nooyi also cited the devastating earthquakes in Mexico and series of powerful hurricanes in the Caribbean in explaining Latin American volumes falling 2%. "We hate to blame weather," she added. 

Pepsi "lose[s] a little bit on speed" due to its size, she noted, and can be slow to respond to trends, losing shelf space to "upstart brands" like LaCroix sparkling water, owned by National Beverage Corp. (FIZZ - Get Report) . Pepsi's unlikely to pursue large acquisitions to capitalize on those trends, however, because "the stuff we've looked at so far, we don't see a clear path to" shareholder value, she said.

Nooyi also touted Pepsi's e-commerce team, which will help the company operate "more like a tech company than a traditional CPG," including "dynamic merchandising and tailored offers."

PepsiCo CEO Indra Nooyi.
PepsiCo CEO Indra Nooyi.

PepsiCo said it sees full-year earnings of $5.23 a share, up from $5.13 previously. 

"Despite the beat & EPS raise, we see little reason to get excited about PEP's Q3 results given increasing cost headwinds, and NAB [North American beverage] results that were much worse than we expected," Wells Fargo Securities LLC analyst Bonnie Herzog wrote Wednesday. We believe PEP will likely deliver its revised FY17 EPS guidance based on productivity savings/cost cutting, but see few positive catalysts that could drive the stock meaningfully higher in the nearterm. We expect the stock to be down slightly today."

Working in PepsiCo's favor when it comes to the more cautious revenue outlook is that Wall Street may have expected it. 

"With PepsiCo shares under-performing even in the context of a broader Staples sell-off (PEP -5.8% vs. XLP -2.1% since 9/5), we think that the market is pricing in concerns around both the quarter and the longer-term outlook," said Barclays analyst Lauren Lieberman ahead of the results. "As it relates to the quarter, most of the dialogue is focused on weakness in the North America Beverages scanner data (PEP dollar sales down -6.3% for the 12 weeks ending 9/9) and whether that will impact the company's ability to deliver on its full year growth target of 'at least 3%' organic sales growth."

It's a time for big changes in food retail, with German grocery giants Aldi and Lidl doubling down on the U.S. and Amazon.com Inc. (AMZN - Get Report) buying Whole Foods for $13.7 billion. Nooyi downplayed the risk of private label penetration, saying the Pepsi brand has been resilient even in Europe. Still, the company is "not complacent." One "plausible scenario" Pepsi could see taking shape in retailers, Nooyi said, is "a bifurcation, with big brands, big companies taking the pressure off retailers...and driving more velocity and traffic." Under such circumstances, Pepsi should continue "doubling down on big brands, making sure innovation is there, making sure execution is perfect," allowing them to make changes fast if need be.

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