PepsiCo raises revenue forecast as it deploys price hikes, smaller sizes to fight rising costs
PepsiCo on Tuesday raised its revenue outlook for the year as consumers snacked on more Doritos chips and drank more Gatorade in its latest quarter even as prices increased.
Shares of the company rose less than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.86 adjusted vs. $1.74 expected
- Revenue: $20.23 billion vs. $19.51 billion expected
Pepsi reported second-quarter net income attributable to the company of $1.43 billion, or $1.03 per share, down from $2.36 billion, or $1.70 per share, a year earlier.
While higher costs weighed on its profits, the food and beverage giant saw a larger hit from the Russia-Ukraine war. It reported a $1.17 billion charge for the quarter related to the conflict. In the wake of the Kremlin’s invasion of the neighboring country last quarter, Pepsi said it was pausing sales in Russia except for some essential items, like baby formula. The company is now trying to discontinue or reposition some of its Russian juice and dairy brands.
Excluding items, the company earned $1.86 per share, topping the $1.74 per share expected by analysts surveyed by Refinitiv.
Net sales rose 5.2% to $20.23 billion, beating expectations of $19.51 billion. Organic revenue, which strips out the impact of acquisitions and divestitures, climbed 13% in the quarter.
For 2022, Pepsi is now expecting organic revenue growth of 10%, up from its prior forecast of 8%. This marks the second consecutive quarter that the company has hiked its revenue forecast without updating its expectations for its earnings. Pepsi is still forecasting core constant currency earnings per share growth of 8%.