- PepsiCo’s third fiscal quarter earnings and revenue surpassed analysts’ forecasts, prompting an upward revision of its full-year earnings outlook.
- Net sales rose by 6.7% to reach $23.45 billion, with organic revenue (excluding acquisitions and divestitures) climbing 8.8% during the quarter.
- However, PepsiCo’s volume, which factors out pricing and currency changes, experienced a decline this quarter due to price increases aimed at mitigating inflation, impacting product demand.
- The company adopted strategies like smaller portions and value packs to boost transactions, offering more affordable options to consumers.
- In the North American beverages unit, there was a 6% decline in volume, and CEO Ramon Laguarta noted the pruning of certain promotions to protect margins, which had previously boosted sales.
Some bright spots in beverages included Gatorade, which saw double-digit revenue growth, and plans to relaunch the fan favorite flavor, Mountain Dew Baja Blast. - The North American food divisions outperformed beverages, with Quaker Foods North America’s volume rising by 1%, and Frito-Lay North America’s volume remaining steady. Market share gains were reported in categories like pancake mix and syrup.
- For the third quarter, Pepsi reported net income attributable to the company of $3.09 billion, or $2.24 per share, compared to $2.7 billion, or $1.95 per share, in the previous year. Excluding specific items, the company earned $2.25 per share, surpassing the expected $2.15.
- For 2023, Pepsi increased its forecast for constant currency earnings per share growth to 13%, up from the previous forecast of 12%. This marks the third consecutive quarter of an upward adjustment in the company’s full-year outlook. It expects to total cash returns to shareholders of approximately $7.7 billion for 2023, comprised of dividends of $6.7 billion and share repurchases of $1.0 billion. John D. Rockefeller once said “the only thing that gives me pleasure? It’s to see my dividends coming in.” PepsiCo is a dividend aristocrat, making it part of an elite group of S&P 500 stocks that has hiked its dividend every year for at least 25 years. PepsiCo has achieved this for an astounding 49 years.
By Lee Kern
Join our Mailing list!
Sign up to get all the latest financial news and business updates.
Sign up to get all the latest financial news and business updates.