PepsiCo reported a big jump in quarterly profit Thursday, despite signs customers are buying fewer soda cans and bags of chips as the company continues to aggressively raise prices.
Pepsi, which makes Gatorade, Lay’s and Quaker Oats, also raised its earnings guidance for the rest of the year, causing the stock to rise.
The company posted revenue of $22.3 billion, up 10 percent in the second quarter ended June 17, and nearly doubled its profit from the same period last year to $2.7 billion. PepsiCo said it expects full-year revenue growth of 10 percent for the year, up from the previous guidance of 8 percent.
The quarterly results beat analysts’ already optimistic expectations as consumers grapple with higher prices while policymakers weigh their next step in their efforts to contain inflation.
Although Pepsi earned more last quarter, the amount of product sold declined. The prices of its products have increased by double-digit percentages over the past six quarters, and the company has reported declining sales volumes over the past three quarters.
Overall, Pepsi’s second-quarter prices were 15 percent higher year-over-year. The increase in the European division of Pepsi was particularly pronounced with a plus of 20 percent. Soaring food prices in Europe have drawn particular attention from economists and policymakers, who say corporate profits there have contributed to stubbornly high inflation.
“We’ve been able to raise prices and consumers are sticking with our brands,” Pepsi CEO Ramon Laguarta said in a phone call with analysts Thursday morning.
Mr. Laguarta cited low unemployment in the United States and around the world as a reason consumers continued to buy Pepsi products. Data released last week showed the US jobs market slowed but was still strong.
Inflation data released on Wednesday showed that consumer prices in the United States, including food, have risen at a slower pace but are still far from the Federal Reserve’s target. Overall, food prices rose 5.7 percent for the year through June.
PepsiCo shares rose about 1 percent on Thursday. The food and beverage giant is one of the first companies to report earnings each quarter, which serve as an indicator of how other companies might fare. FactSet estimates companies in the S&P 500 are expected to see earnings fall 7 percent in the second quarter.
Coca-Cola and Nestlé will announce earnings later this month. Several major banks will release their results on Friday.