Bottles of PepsiCo Inc. brand Pepsi soda for sale at a grocery store in Bagdad, Kentucky, U.S., on Friday, April 9, 2021.
Luke Sharrett | Bloomberg | Getty Images
PepsiCo on Tuesday reported that its quarterly revenue rose more than 20% compared with the prior year as restaurant demand for its drinks returned, fueling an earnings beat.
The company also raised its outlook for its full-year adjusted earnings per share growth.
Shares of the company rose as much as 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.72 adjusted vs. $1.53 expected
- Revenue: $19.22 billion vs. $17.96 billion expected
Pepsi reported fiscal second-quarter net income of $2.36 billion, or $1.70 per share, up from $1.65 billion, or $1.18 per share, a year earlier.
Excluding items, the company earned $1.72 per share, beating the $1.53 per share expected by analysts surveyed by Refinitiv.
Net sales surged 20.5% year-over-year to $19.22 billion, topping expectations of $17.96 billion. Organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, rose 12.8%.
The company’s North American beverage business reported organic revenue growth of 21%, the highest of all of Pepsi’s divisions this quarter. Volume for its drinks soared 15%, and food service revenue, which includes sales to restaurants, stadiums and college campuses, doubled during the quarter. A year prior, the division’s organic revenue fell 7%.
Frito-Lay North America, which includes brands like Doritos and Cheetos, saw organic revenue growth of 6%. Convenience stores and food service channels helped boost sales as consumers became more mobile. The segment has seen strong sales throughout the pandemic. A year ago, it reported organic growth of 6%.
The Quaker Foods North America business was the only division to report sinking organic revenue. Its volume fell 21%, pushing organic revenue down by 14%. The same time a year ago, the segment saw organic sales surge 23% as consumers ate more breakfast at home, fueling demand for its maple syrup and oatmeal. Pepsi said that the division’s organic revenue was up 9% on a two-year basis. Prior to the pandemic, it was the weakest part of Pepsi’s business.
On the heels of such a strong quarter, the company said that it now expects constant currency earnings per share growth of 11%, up from its prior forecast of high-single digit growth. The forecast implies core earnings per share of $6.20 for 2021. Analysts were expecting full-year earnings growth of 7.2%.
Pepsi also narrowed its forecast for 2021 organic revenue growth from mid-single digits to 6%.
The company said that it is expanding the duration and scope of its five-year productivity program. Through 2026, it now expects to deliver at least $1 billion in annual savings.
This is breaking news. Please check back for updates.