PepsiCo tops estimates with Q3 growth | Progresiv
PepsiCo reported better-than-expected results for its fiscal third quarter, as it benefitted from increased investment in advertising and marketing. 
For the three months to 7 September 2019, net revenues grew by 4.3% to 17.2 billion dollars, with beverage volumes up 2% and food & snacks volumes up 1%. Meanwhile, operating profit edged up 0.4% to 2.86 billion dollars, although net profit fell by 15.9% to 2.1 billion dollars.
The results were driven by a strong performance at its Frito Lay North America unit, which saw revenues grew by 5.5% on volume growth of 1.5%. PepsiCo attributed the growth to increased demand for its healthier-for-you snacks and popular chips, which offset double-digit sales declines of hummus and guacamole dips.
The group also saw decent growth at its North American beverage business, where revenues rose by 3.5%, helped by increased market share for Gatorade, although overall volumes slid by 1%. However, growth was more modest at the Quaker Oats North America unit, with revenue up just 1% and volumes down 1%.
International growth remained solid, with PepsiCo recording a 4% rise in revenues in both Latin America and Europe and sub-Saharan Africa, as well as a 9% increase in Asia, Middle East & North Africa.
CFO Hugh Johnston said: “The increased advertising that we have is causing consumers to shop us more aggressively, and our customers are rewarding us with that [grocery] space because they know that we can help them grow.”
CEO Ramon Laguarta added: “Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%.” The group also continues to expected adjusted earnings per share to decline by 1% for the year, on a constant-currency basis. (www.kamcity.com)
