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Diving overview:
- PepsiCo said Thursday that it has named Steve Schmitt, a former Wal-Mart financial executive, as CFO, effective Nov. 10.
- Schmidt currently serves as CFO of Walmart U.S. and will replace PepsiCo CFO Jamie Caulfield, who has decided to retire next year after more than 30 years at the beverage and food giant, the company said.
- “Steve’s experience working with complex supply chains, adapting to a dynamic retail environment and omnichannel consumer, and delivering operational excellence at scale will be impactful at PepsiCo,” Ramon Laguarta, the company’s chairman and CEO, said in a press release. “He will play a critical role in helping us accelerate growth, optimize our cost structure and create greater value for our shareholders.”
Dive Insights:
With Pepsi Doritos Maker announced changes to its financial leadership while also releasing a better-than-expected quarterly earnings report. The company reported third-quarter sales of $23.94 billion, up about 2.6% from the same quarter last year.
Organic revenue, excluding acquisitions, divestitures and foreign exchange, increased 1.3% in the quarter. The 4% price increase “more than offsets the 3% volume decline,” mostly in North America, according to Morningstar analyst Dan Su.
“Although volumes in North America continued amid macro headwinds, management remains cautious about increasing investments in innovation and at-home channels to increase consumer engagement,” Su said in a client note.
Going forward, as recipe innovations and affordability initiatives come to fruition, the company’s North American sales will rebound in coming quarters, helping to return organic sales growth to the 4% to 6% range over the longer term, the analyst said.
Additionally, Schmitt’s arrival as the company’s new finance chief will allow him to “leverage his omnichannel retail expertise and cost discipline to support PepsiCo’s turnaround,” according to a Morningstar note.
Schmidt, 52, will receive an annual salary of $900,000 in his new position, according to a securities filing. He’s also scheduled to receive a hefty sign-on bonus, $2 million to be paid immediately and $1.5 million to be paid on his anniversary.
According to his LinkedIn page, Schmidt has been working at Walmart for the past six years and became CFO of the U.S. financial organization in October 2021. PepsiCo said Schmidt “played a critical role in transforming Walmart into an omnichannel retailer through digital transformation and leading cost discipline initiatives.”
Before joining Walmart, Schmitt held various roles at Yum! He worked at Brands from 2006 to 2016, “developing expertise in quick-service restaurants and home-based businesses and evaluating long-term strategies, including strategic opportunities to support growth,” according to PepsiCo’s securities filing.
Caulfield will remain CFO until Nov. 10, at which time he will assume an advisory role and support the transition until May 15, 2026, according to Thursday’s announcement.
