Pepsi soft drinks are displayed at a convenience store in San Francisco, California.
Justin Sullivan | fake pictures
PepsiCo reported Monday that its quarterly revenue fell as fewer consumers bought their drinks at restaurants or convenience stores as a result of the coronavirus pandemic.
The company reported growth in its food products, such as Cheetos and oats, in the quarter.
The company’s shares rose 3.3% in premarket trading.
Pepsi said it would not provide a perspective for fiscal year 2020 at this time, citing the continued volatility and uncertainty surrounding the pandemic.
Here’s what the company reported compared to what Wall Street expected, according to an analyst survey by Refinitiv:
- Earnings per share: $ 1.32, adjusted, vs. $ 1.25 expected
- Revenue: $ 15.95 billion vs. $ 15.38 billion expected
In the second quarter ending June 13, Pepsi reported net income of $ 1.65 billion, or $ 1.18 per share, below $ 2.04 billion, or $ 1.44 per share, a year before. CEO Ramón Laguarta said the company spent nearly $ 400 million on costs related to the pandemic, including personal protective equipment for employees.
Excluding items, the company earned $ 1.32 per share, beating the $ 1.25 per share expected by analysts surveyed by Refinitiv.
Net sales fell 3.1% to $ 15.95 billion, exceeding expectations of $ 15.38 billion. The company’s organic revenue, which eliminates foreign exchange, acquisitions and divestments, fell 0.3%.
PepsiCo’s beverage unit in North America experienced a 7% drop in its organic revenue, despite growth in supermarkets and dollar stores. The closure of restaurants, cinemas and sports stadiums weighed on the business, but not all of their drinks suffered. Pepsi Zero Sugar and Bubly saw double-digit revenue growth.
Quaker Foods North America reported organic revenue growth of 23% as consumers bought more oatmeal for breakfast and pastries. Laguarta said consumers continued to buy these items even when economies opened at the end of the quarter. The company has drawn up a marketing plan for the rest of the year to retain these sales, including the launch of Cheetos mac and cheese.
Frito-Lay North America experienced organic sales growth of 6%.
Outside of North America, the company reported a decrease in organic sales in its Europe and Africa, Middle East and South Asia segments. Organic revenues in Latin America were stable, while the Asia Pacific, Australia and New Zealand and China segments recorded organic sales growth of 15%.
Laguarta said the company saw signs of improvement in May and June as many economies began to reopen and consumers resumed some of their previous habits.
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