Pepsi products go on sale at a Target store on March 8, 2022 in Los Angeles, California.
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PepsiCo on Tuesday reported quarterly earnings and sales that beat analysts’ expectations as consumers paid more for their Doritos, Quaker oatmeal and Gatorade.
Following its strong performance, the company raised its guidance for full-year organic sales growth.
The company’s shares were flat in premarket trading.
Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: Adjusted $1.29 vs. $1.23 expected
- Revenue: $16.2 billion versus $15.56 billion expected
Pepsi reported net income attributable to the company of $4.26 billion, or $3.06 per share, for the first quarter, up from $1.71 billion, or $1.24 per share, a year earlier.
The food and beverage giant reported a $193 million after-tax impairment as it seeks to discontinue or reposition some of its juice and dairy brands in Russia. The charges reduced earnings by 14 cents per share. An additional $241 million after-tax impairment related to the Russia-Ukraine conflict impacted earnings by 17 cents per share.
In March, Pepsi joined a number of other western countries to shut down part of its Russian business, but failed to halt sales entirely like rival Coca-Cola. Pepsi generates about 4% of its annual sales in Russia, making the country one of the few markets where it has a larger presence than Coke. Pepsi said it will continue to sell some essential products like baby formula, milk and baby food.
Excluding the sale of its juice business, the Russian impairment and other items, the company earned $1.29 per share, beating the $1.23 per share expected by analysts polled by Refinitiv.
net sales rose 9.3% to $16.2 billion, beating expectations of $15.56 billion. Organic sales rose 13.7% in the quarter, mainly due to higher prices.
The company’s North American beverage business saw volume growth of 3%. This quarter marked the start of Pepsi’s foray into alcohol with Hard Mtn Dew, made in partnership with Boston Beer.
Frito-Lay North America saw volume growth of just 1% for the quarter, even as the segment’s organic sales rose 14%. The company said Doritos, Lay’s, Ruffles and Cheetos all saw double-digit sales growth.
Quaker Foods was the only North American business to report declining volumes during the quarter. The segment struggled to retain the consumers it gained in the early days of the pandemic, when more people were eating breakfast at home. Still, Pepsi said it gained market share in the rice and pasta, light snack, ready-to-eat cereal, and snack bar categories.
For the full year, Pepsi now expects organic sales growth of 8%, up from its previous guidance of 6%. The company reiterated its guidance for core earnings per share growth of 8% for the full year.
Read the full press release here.
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