PepsiCo has reported a 3.1% decline in net revenue in its second quarter results, yet has continued to witness ‘resiliency’ in its global snacks and foods business.
In the three months ended 13 June, PepsiCo posted net revenues of $15.95 billion, beating analyst forecasts in what has been described as ‘stronger-than-expected results’.
Frito Lay North America sales grew 7% to $4.27 billion, offsetting a decline in its other largest division, PepsiCo Beverages North America. The company’s beverage unit saw its sales drop by 7% and its operating profit fall by 42%.
PepsiCo’s latest figures follow along the same pattern as its first-quarter results, in which it had noted a decrease in immediate consumption and away-from-home channels due to Covid-19 which was negatively impacting its beverages business.
Meanwhile, consumer demand for its snack business has continued to rise. Earlier this month, Frito-Lay announced its decision to invest $200 million to expand its snack manufacturing operations in Perry, Georgia.
PepsiCo saw a net revenue rise of 23% in its Quaker Foods North America unit to $664 million and a 55% increase in operating profit.
Last month, PepsiCo’s Quaker Oats subsidiary announced that it will replace and retire its Aunt Jemima range of breakfast products, acknowledging the imagery behind the brand was “based on a racial stereotype”.
In its Europe and Latin America segments, net revenue declined by 9% and 17%, respectively.
“Despite being faced with significant challenges and complexities as a result of the Covid-19 pandemic, our businesses performed relatively well during the quarter, with a notable level of resiliency in our global snacks and foods business,” said PepsiCo chairman and CEO, Ramon Laguarta.
He added: “Encouragingly, as restrictions and closures eased and population mobility improved as the quarter progressed, we also saw an improvement in our business performance and channel mix dynamics. However, the environment has remained volatile and much uncertainty remains about the duration and long-term implications of the pandemic.
“As a result, we are not providing a financial outlook for fiscal year 2020 at this time. We remain focused on winning in the marketplace with our strong portfolio of brands in attractive categories, agile supply chain and flexible go-to-market systems, while also building on our competitive advantages, to emerge an even stronger company in the future.”
© FoodBev Media Ltd 2020
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