Key Points
- PepsiCo beat earnings and revenue estimates and raised full-year guidance due to changing consumer habits.
- Snack sales and beverages from PepsiCo rose, although volumes declined due to higher prices.
- The company said its products remain attractive as “affordable luxury.” in times of high inflation.
Strong sales of snacks and beverages helped PepsiCo (PEP) post better-than-expected quarterly results, and the food giant improved its outlook.
The maker of soda Pepsi and Doritos chips has posted earnings of $2.09 per share in the second quarter of fiscal 2023, with sales up 10.4% to $22.32 billion. Both beat analysts' forecasts. Sales at its North American snacks unit increased 14%, while revenue at its beverage unit increased 10%.
Higher prices reduced demand, with the volumes of ready meals and drinks fell by 3% and 1% respectively. Still, the company noted that they didn't fall as much as expected due to low unemployment worldwide.
CEO Ramon Laguarta said that with high inflation, every consumer makes adjustments. However, CFO Hugh Johnston added that PepsiCo products remain an “affordable luxury”.
PepsiCo has indicated that It sees full- organic revenue growth of 10%, up from the previous 8%, and constant currency EPS growth of 12%, up from the previous 9%.
The PepsiCo stock rose 1.5% in early trading Thursday, but remained well below its all-time high set in May.
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Source: investopedia.com
