PepsiCo indicated that it will likely see lower earnings in 2025 due to President Donald Trump’s tariffs and consumers’ changing spending habits.

The snacks and beverages maker had expected mid-single-digit percentage growth, but it lowered those expectations, with its prospects now aligning with its 2024 performance.

PepsiCo relayed this news as part of its first-quarter-2025 results Thursday, with chairman and CEO Ramon Laguarta noting that the “volatility and uncertainty” brought on by recent trade developments will result in a probable increase in supply chain costs.

One example is the price of imported aluminum used in making soda cans, which was hit with a 25% tariff charge. The global tensions have caused ripple effects for PepsiCo, with certain international markets reporting lower sales.

Another way the tariffs impact PepsiCo is that the concentrate for its Pepsi and Mountain Dew drinks is made in Ireland and will be subject to a 10% import charge.

However, PepsiCo’s archrival, Coca-Cola, is sitting pretty in this trade war, as it makes most of its concentrate for its soft drink products locally in Atlanta and Puerto Rico, a U.S. territory, thereby avoiding additional production costs.

According to ABC News, PepsiCo noted that its earnings have been affected by consumers voting with their wallets due to years of price increases. They have either pulled back on purchasing its products—which include Gatorade and Doritos snacks—and/or switched to healthier options.

For the first quarter, PepsiCo reported $17.9 billion in net revenue, a drop of 1.8% from the previous quarter.