Cases of Pepsi are shown for sale in a store in Carlsbad, California, April 22, 2017.
Mike Blake | Reuters
PepsiCo reported quarterly results Thursday that beat analysts’ estimates, despite the uneven recovery of the company in its international markets.
It’s the company’s first quarter of tough comparisons with early inventory. CEO Ramon Laguarta said Pepsi has also been looking into weather-related business interruptions in the United States.
The company’s shares rose less than 1% in premarket trading.
Here’s what Pepsi said compared to Wall Street expectations, based on an analyst survey by Refinitiv:
- Earnings per share: $ 1.21 adjusted versus $ 1.12 expected
- Revenue: $ 14.82 billion versus $ 14.55 billion expected
Pepsi reported net income of $ 1.71 billion, or $ 1.24 per share, for the first quarter, compared to $ 1.34 billion, or 96 cents per share, a year earlier.
Excluding items, the food and beverage giant earned $ 1.21 per share, beating analysts polled by Refinitiv, which was forecasting $ 1.12 per share.
Net sales rose 6.8% to $ 14.82 billion, beating expectations of $ 14.55 billion. Organic revenues, which exclude the impact of foreign currency, acquisitions and divestments, rose 2.4% for the quarter as consumers maintained their sneak pandemic snacking habits.
Frito-Lay North America’s organic sales increased 3%. New products like Doritos 3D Crunch and Cheetos Crunch Pop Mix encouraged consumers to keep snacking. However, the segment’s profits were hurt by the winter storms in February.
The North American beverages business recorded organic sales growth of 2%. The company saw double-digit sales growth in bubly fizzy water and Starbucks ready-to-drink coffees. Laguarta also said that Rockstar Energy returned to positive sales growth after the company redesigned the brand earlier this year. Pepsi bought Rockstar for $ 3.85 billion in 2020.
Quaker Foods North America’s organic sales grew only 1% for the quarter. The segment has benefited the most from the home breakfast trend, which may fade as more consumers return to their offices.
Outside North America, results were mixed as some markets struggled with new virus outbreaks. Most of the first quarter of its international markets only includes January and February. Organic sales in Europe were unchanged from the previous year, while sales in Africa, the Middle East and South Asia decreased 1%. Organic sales in Latin America rose 3%, while the Asia-Pacific, Australia, New Zealand and China segment grew a whopping 18%.
The company reiterated its guidance for 2021, which expects organic sales growth in the mid-single-digit range and currency-neutral earnings per share in the high-single-digit range. Pepsi is forecasting strong sales for its North American beverage unit as more consumers visit restaurants and movie theaters, but demand for Quaker Foods products is likely to decline. Executives told analysts on the conference call that Covid-19-related spending tends to decline when cases fall.