PepsiCo has beat earnings and revenue expectations for its third-quarter results that ended 7 September 2019, as a result of increased spending on advertising.
According to Reuters, PepsiCo’s advertising and marketing expenses grew 12% in 2019 representing the companies push for its trademark colas, Mountain Dew and Gatorade drinks.
The multinational corporation recorded a 4.3% increase with a net revenue of $17.19 billion, while Pepsi’s organic revenue also grew by 4.3% during the quarter.
In a statement, chairman and CEO Ramon Laguarta of PepsiCo said they expect to meet or exceed its full-year organic revenue growth target of 4%.
The maker of brands such as Gatorade, Cheetos and Pepsi reported an operating profit of $2.86 billion, representing a slight increase since last year, while it delivered a net income of $2.11 billion, down from $2.51 billion last year.
Frito Lay North America and PepsiCo Beverages North America both played strong roles, contributing $4.11 billion and $5.64 billion and recording a revenue growth of 5.5% and 3.5% respectively.
The growth was supported by the expansion of Frito Lay’s snack line up with brands such as Bare and Off the Eaten path which saw double-digit growth. Meanwhile, its mainstream brands like Doritos, Ruffles and Fritos saw strong net revenue growth.
Laguarta said: “We are pleased with our results for the third quarter. While adverse foreign exchange translation negatively impacted reported net revenue performance, organic revenue growth was 4.3% in the quarter.”
During the conference call discussing PepsiCo’s results, Lagurata added: “PepsiCo’s performance today gives us confidence that the strategy we laid out in February to become faster, stronger and better is working.
“Importantly, we’re balancing our investments to both drive results in the short-term and position our business for sustained long-term performance.”
© FoodBev Media Ltd 2019