PepsiCo raises annual revenue forecast

[BENGALURU] PepsiCo Inc raised its full-year revenue forecast on Tuesday, as the easing of pandemic restrictions boosts demand for sodas at theatres and restaurants.

Although the soft-drinks maker is grappling with supply-chain constraints that are making it more challenging to fully meet consumer demand, it said it was expecting fiscal 2021 organic revenue to rise about 8 per cent, compared with its prior forecast of a 6 per cent increase.

The company also said core earnings per share will at least reach its US$6.20 target.

Revenue rose 9 per cent on an organic basis in the third quarter, as pandemic-weary consumers continued to emerge from their homes, purchasing PepsiCo's sugary sodas and salty snacks at public venues such as restaurants, bars and stadiums.

The results demonstrate that PepsiCo continues to recover from the Covid-19 pandemic, with its North American businesses bouncing back from the crisis that altered consumption habits for more than a year. Total organic sales, which exclude acquisitions and currency changes, reached US$20.2 billion in the quarter, the company said in a statement Tuesday.

Analysts expected US$19.4 billion on average, according to estimates compiled by Bloomberg. PepsiCo shares rose 0.8 per cent to US$151.42 in mid-morning trading in New York. The stock was up 1.3 per cent this year through Monday, trailing behind the 14 per cent gain of the S&P 500 index. Earnings for the quarter were US$1.79 a share, PepsiCo said, beating analysts' average estimate of US$1.74.

The company's Frito-Lay North America unit saw organic revenue increase by 5 per cent during the quarter, as products such as corn chips and potato chips remained popular.

The Quaker Foods North America unit had growth of only 1 per cent, with fewer consumers having breakfast foods such as the company's cereals at home. PepsiCo's North American beverage business benefited from the rising number of people who are again buying fountain drinks such as Diet Pepsi and Mountain Dew at on-premise venues. PepsiCo said its Latin America business saw organic revenue increase by 19 per cent, as more consumers in those countries have received Covid-19 vaccinations and returned to public venues.

REUTERS, BLOOMBERG