Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Pepsico Gains on Raising Annual Guidance as Q3 Numbers Top Estimates

Published 10/05/2021, 07:39 AM
Updated 10/05/2021, 07:39 AM
© Reuters.

© Reuters.

By Dhirendra Tripathi

Investing.com – PepsiCo stock (NASDAQ:PEP) traded 1.2% higher in Tuesday’s premarket as the company raised its guidance for the year after beating estimates for the third quarter.

Hopes for a better year were kindled at the company as more people returned to restaurants and theaters, boosting demand for its snacks and beverages.

The company now expects full-year organic revenue to increase approximately 8% compared to its previous forecast of 6%.

The shares initially reacted negatively, amid signs of a slowdown in sales growth by volume, but quickly recovered to trade higher.  

For the 12 weeks ended September 4, Pepsico recorded 9% organic revenue growth, comprising 4 percentage points of volume growth and a 5-percentage-point contribution from price and mix.

This compares to volume growth of 7 percent in the second quarter, when revenue rose 12.8%.

North America is the biggest market for Pepsico and that threw up some challenges for it.

PepsiCo Beverages North America delivered 7% organic revenue growth in the third quarter while Frito-Lay North America posted 5%. The two businesses in the region had grown by a far faster 21% and 6%, respectively, in the second quarter. International organic revenue grew 14%.

The company said it grew its market share in the carbonated soft drink category in North America, driven by trademark Mountain Dew. It also gained share in the ready-to-drink tea and water categories.

Pepsico’s third-quarter net revenue rose nearly 12% to $20.18 billion but profits fell as cost of sales rose more than 15% and selling expenses also went up by 10%. Profit fell 3% to $2.22 billion, but on a per share basis, it was higher than estimates.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.