PepsiCo said on Tuesday that its quarterly revenues were up more than 20% from a year earlier, as restaurant demand for its drinks returned, fueling higher profits.
The company also raised its outlook for full-year adjusted earnings per share.
“A lot of the things we did during the pandemic, continuing to invest in the business, are now paying dividends now that mobility has increased and consumers are leaving more,” CFO Hugh Johnston said on Tuesday. CNBC’s Squawk Box.
The company’s shares rose more than 1% in pre-market trading, putting it on track to usher in a new all-time high. The stock is up 2% this year, giving it a market value of $ 209 billion.
Here’s what the company reported for the second fiscal quarter compared to what Wall Street expected, based on an analyst survey by Refinitiv:
- Earnings per share: $ 1.72 adjusted vs. $ 1.53 expected
- Turnover: $ 19.22 billion against $ 17.96 billion expected
Pepsi reported net income of $ 2.36 billion, or $ 1.70 per share, from $ 1.65 billion, or $ 1.18 per share, a year earlier.
Excluding items, the company gained $ 1.72 per share, exceeding the $ 1.53 per share expected by analysts polled by Refinitiv.
Net sales jumped 20.5% year-on-year to $ 19.22 billion, beating expectations of $ 17.96 billion. Organic sales, excluding currency effects, acquisitions and disposals, increased by 12.8%.
A Burger King meal that includes burgers and Pepsi sodas sits on a tray inside a Burger King fast food restaurant.
Audrey Rudakov | Bloomberg | Getty Images
The company’s beverage business in North America reported organic revenue growth of 21%, the highest of any Pepsi division in the quarter. Its beverage volume climbed 15% and restaurant revenues, which include sales to restaurants, stadiums and college campuses, doubled in the quarter. A year earlier, the division’s organic sales had fallen by 7%.
Frito-Lay North America, which includes brands like Doritos and Cheetos, reported organic revenue growth of 6%. Convenience stores and restaurant channels helped drive sales as consumers became more mobile. The segment recorded strong sales throughout the pandemic. A year earlier, it posted organic growth of 6%.
The Quaker Foods North America business was the only division to report declining organic sales. Its volume fell by 21%, resulting in a drop in organic sales of 14%. Around the same time a year ago, the segment saw its organic product sales increase 23% as consumers ate more breakfast at home, fueling demand for its maple syrup and oatmeal. Pepsi said the division’s organic revenue was up 9% on a two-year basis. Before the pandemic, it was the weakest part of Pepsi’s business.
Following such a strong quarter, the company said it now expects 11% growth in earnings per share in constant currencies, up from its earlier forecast of single-digit growth. . The forecast assumes a base earnings per share of $ 6.20 for 2021. Analysts expected full-year earnings growth of 7.2%.
Pepsi also lowered its forecast for organic revenue growth in 2021 from average to single digits at 6%. Johnston told CNBC’s Becky Quick that the company tends to provide more cautious forecasts, which could allow it to beat expectations in the second half of the year.
The company also said it was extending the length and scope of its five-year productivity program. By 2026, he now plans to achieve at least $ 1 billion in annual savings.