PepsiCo boosts earnings outlook for second straight quarter

PepsiCo boosted its earnings outlook for the second quarter in a row as sustained consumer demand for beverages and snacks helped it shrug off concerns around inflation and the impact of a stronger dollar.

The New York-based consumer group said it expected organic revenue to increase 10 per cent in 2022, up from the 8 per cent it forecast three months ago and the 6 per cent it penciled in at the start of this year.

Chief executive Ramon Laguarta said he was “pleased” with the latest results “as our business momentum continued despite ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets”.

PepsiCo reported a 5.2 per cent year-on-year jump in net revenue to more than $20.2bn in the quarter to mid-June, beating Wall Street’s forecast for $19.5bn.

Sale volumes for snacks and beverages increased 3 per cent and 6 per cent respectively during the quarter, matching the rate of three months ago.

Growth in the company’s markets in Latin American, the Middle East, Africa and Asia Pacific helped offset contractions in its main markets of Europe and North America. Snack and beverage volumes in Europe were down 7 per cent and 8 per cent respectively, compared with a year earlier.

However, the impact of Russia’s war against Ukraine led to a $1.4bn pre-tax impairment charge, pushing net income down to $1.43bn. Analysts surveyed by Refinitiv had expected net income of about $2.4bn, excluding those charges.

PepsiCo shares were up 0.4 per cent in pre-market trading. At their close on Monday of $170.47, the shares were trading about 4 per cent below a record high struck in late April following the company’s first-quarter results.