PepsiCo sustains revenue, profit growth with price increases, healthier drinks and snacks

PepsiCo said on Tuesday that price increases implemented on its premium products in North America helped lift sales and profits in the second quarter.

The soft drinks giant recorded a 2% growth in revenue to $15.4bn in the second quarter, while net profit climbed 5% to $2.1bn. Half-year profit grew 17% to $3.4bn. It notes that “guilt-free” drinks which it describes as drinks with fewer than 70 calories such as diet sodas, and foods with lower levels of sodium and saturated fat like baked crisps which now account for about 45% of the its sales helped fuel higher revenue and profit.

The company noted that 9% of its sales came from products launched in the past three years. Hugh Johnston, PepsiCo’s chief financial officer, said that the price–raising strategy would continue through the year.

On a segment basis, the company’s Frito-Lay North American Division saw a 3% sales lift to $3.6bn in the three months to June 17, while its North American Beverages Unit recorded 2% growth to $5.2bn in the period.

In Latin America, the company saw stronger sales growth of 6%, driven by productivity gains as revenue rose to $1.8bn, from $1.7bn.

Europe Sub-Saharan Africa saw 6% growth in sales, again helped by productivity gains.

Asia, Middle East and North Africa saw revenue decline of 8% to $1.6bn, hurt by higher raw material costs and unfavourable foreign exchange headwinds.

The soft drinks giant raised its guidance on core earnings for the year to $5.13 per share, up from $5.09 as renewed dollar weakness helped reduce the effects of currency headwinds it was expecting.

You may also like:

Leave a Reply

Your email address will not be published. Required fields are marked *