PepsiCo has reported an increase in its second-quarter revenue and beat on analysts’ predictions for operating profit, which grew 1% to $2.99 billion.
For the 12 weeks to the middle of June, net revenue was $15.71 billion – up 2% on the same period last year – while organic growth was 3.1%.
PepsiCo chairman and CEO Indra Nooyi said: “Our results for the second quarter were very much in line with our expectations and we remain on track to meet our 2017 financial goals. The power and durability of our brand and product portfolios, strong marketplace execution, and the balance of our geographic footprint enabled us to deliver strong operating results in the midst of pockets of macroeconomic challenges and increasingly dynamic retail and consumer landscapes.”
PepsiCo’s business in Asia, the Middle East and North Africa, as well as its Quaker Foods North America division, were the only segments to report revenue decline in the second quarter – down 8% and 1% respectively.
North America Beverages was up 2%; Europe and Sub-Saharan Africa, and Latin America, both up 6%; and Frito-Lay North America up 3%.
Strong growth in operating profit of almost 50% in Europe and Sub-Saharan Africa was contrasted by 19% decline in operating profit across Asia, the Middle East and North Africa.
Quaker Foods North America managed to maintain operating profit, despite dropping $8 million in revenue.
Latin America was the only other region to report a fall in profit, down 6% in the second quarter to $228 million.
The quarter was impacted by $26 million’s worth of net losses on mark-to-mark commodity hedges, and affected by restructuring including the ceasing of operations of the Müller Quaker Dairy joint venture in North America in 2016 and the sale of PepsiCo’s minority stake in Britvic.
This was offset by ‘productivity gains’ across the board in all of PepsiCo’s segments.
It was also helped by higher pricing of its snacks and carbonates in North America.
© FoodBev Media Ltd 2020