PepsiCo’s revenue grew 12% As a result, the company will continue to raise prices
The producer of soft drinks and snacks PepsiCo (PEP) has reported for the third quarter of 2021.
Compared to the third quarter of last year:
- Revenue increased by 11.6% to $ 20.2 billion.
- Organic sales are up 9%.
- Operating profit increased by 4.9% to 3.2 billion.
- Net income fell 2.9% to 2.2 billion.
PepsiCo’s results were better than analysts’ expectations. The company also raised its 2021 sales target. On the day, PepsiCo shares rose 0.6% to $ 151.1. PepsiCo divides sales in North America, in the primary market for the company, into three segments. Here’s how the revenue grew compared to last year: PepsiCo Beverages – Pepsi, Tropicana, Mountain Dew, and others – by 7%; Frito-Lay – chips and snacks, such as Lay’s and Cheetos – by 6%; Quaker Foods – Oatmeal and Desserts – 2%. In other regions, PepsiCo’s sales also grew: in Latin America, up 27%; in Europe – by 9%; in Africa, the Middle East and South Asia – by 33%; in the Asia-Pacific region and China – by 27%. Like many others, PepsiCo faced inflationary pressures and supply chain disruptions.
Due to the rising prices of goods and transportation, the company’s costs are also increasing. Thus, despite the growth in sales of chips and snacks, the operating profit in the Frito-Lay segment remained the same. In the Quaker Foods segment, operating profit even fell 27%. To cut costs, the company plans to raise prices for its products further—logistics problems by high consumer demand. After lifted the restrictions, the need for PepsiCo drinks in public catering and cinemas increased.
According to the company’s CFO, PepsiCo had to “fight” over the cans and bottles for its soda. As a result, PepsiCo predicts organic sales, excluding exchange rates and structural changes, will grow by 8% in 2021. The previous forecast was 6%. Since the beginning of the year, the company’s shares have been up 4.7%. The sector of essential goods added almost the same amount – 4.1%. The S&P 500 broad market index rose 17.4% over the same period.
