© Reuters. FILE PHOTO: Bottles of Pepsi are pictured at a grocery store in Pasadena, California, U.S., July 11, 2017. REUTERS/Mario Anzuoni/File Photo
By Ananya Mariam Rajesh
(Reuters) -PepsiCo Inc said on Thursday it will not raise prices of its sodas and snacks further after multiple rounds of price hikes last year helped the beverage giant post fourth-quarter profit and revenue ahead of analysts' estimates.
A near duopoly in the carbonated drinks market with Coca-Cola (NYSE:) Co helped PepsiCo (NASDAQ:) raise prices with little pushback from consumers as it battles higher freight and commodity costs, as well as the impact of a stronger dollar on international revenue.
"We have most of our price increases for the year already in place," PepsiCo Chief Financial Officer Hugh Johnston told Reuters.
While the company expects inflationary pressures to persist in 2023, it still sees consumer demand being resilient.
PepsiCo is in a "real sweet spot" in terms of consumers since they have enough money to buy themselves affordable treats, Johnston said.
The slowdown in pricing should ultimately be offset by better volumes and demand for non-alcoholic beverage products are going to remain strong, Wedbush Securities analyst Gerald Pascarelli said.
PepsiCo's shares rose 1.7% to $174.04 after it also raised its annual dividend by 10% to $5.06 per share.
The company's North America beverages unit, which houses brands such as Mirinda, 7UP and Gatorade, posted an organic revenue growth of 10% in the fourth quarter.
Average prices jumped 16%, while organic volume slipped 2%.
The Frito-Lay maker however, forecast annual profit below estimates and said it expects some pushback on prices in the second half of the year.
On an adjusted basis, PepsiCo earned $1.67 per share in the fourth quarter, beating estimates of $1.65, according to Refinitiv data.
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.