Pepsico beats revenue estimates as demand for snacks surged
Pepsico beat estimates for quarterly revenue and profit, powered by a surge in demand for snacks during lockdowns triggered by the pandemic.
Consumers stocked up on snacks as many pivoted to working and studying at home in a bid to curb the spread of infection. Sales of snacks under the Frito-Lay North America unit rose seven per cent in the second quarter.
Sales of Quaker Foods North America unit surged 23 per cent.
Revenue at Pepsico’s North America drinks unit dropped seven per cent as restaurants and vending machines remained closed. The group’s Latin America and Europe units fell 17 per cent and nine per cent respectively.
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Net revenue fell 3.1 per cent in the second quarter to $15.95bn, but topped estimates of $15.38bn, according to IBES data from Refinitiv.
Net income attributable to the company fell to $1.65bn in the three months to 13 June, from $2.04bn a year earlier.
Pepsico said it would not provide an outlook for the year at this point, citing the continued volatility and uncertainty surrounding the Covid-19 crisis.
Chief executive Ramon Laguarta said: “Encouragingly, as restrictions and closures eased and population mobility improved as the quarter progressed, we also saw an improvement in our business performance and channel mix dynamics. The environment has remained volatile and much uncertainty remains about the duration and long-term implications of the pandemic.”
William Ryder, equity analyst at Hargreaves Lansdown said: “While the pandemic has been disruptive and raised costs in the short term, Pepsi is well placed to bounce back – the group’s enviable stable of brands should be enough to see them through.”