PepsiCo's Sales Rise on Boost From Snacks--Update

Date : 04/17/2019 @ 4:43PM
Source : Dow Jones News
Stock : Pepsico, Inc. (MM) (PEP)
Quote : 125.8  -1.12 (-0.88%) @ 7:32PM

PepsiCo's Sales Rise on Boost From Snacks--Update

PepsiCo, Inc. (NASDAQ:PEP)
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By Jennifer Maloney and Kimberly Chin 

PepsiCo Inc. said a key measure of quarterly sales grew at its fastest rate in more than three years, boosted by a rebound in its namesake soda after the food and drinks giant ramped up advertising.

Overall organic revenue, which excludes currency fluctuations, acquisitions and asset sales, rose 5.2% from a year ago -- its best growth since the third quarter of 2015. The company has forecast 4% organic revenue growth for 2019.

The latest gains were boosted by a turnaround in its North America beverages unit and strong sales of its Frito-Lay snacks. After sales slumped last year for key brands including Pepsi-Cola, Mountain Dew and Gatorade, PepsiCo increased spending on advertising and added delivery routes.

"In North America, the brand Pepsi is actually back and growing again," Chief Financial Officer Hugh Johnston said in an interview. "It's probably the best mark as to whether our advertising is working." Sales of trademark Pepsi increased 3% in the first quarter, the company said.

Shares of PepsiCo rose 2.5% in early Wednesday trading to $125.46, and are trading near an all-time high.

While the company has ramped up advertising for its core brands, it has also heavily promoted Pepsi Zero Sugar and launched new drinks including Gatorade Zero and Bubly flavored seltzer in response to a consumer shift away from sugary sodas. Sales of Quaker oatmeal have sagged as consumers spend less time in the center aisles of the supermarket browsing packaged foods.

Overall, PepsiCo said revenue rose 2.6% to $12.88 billion, including a 5.5% gain in the North America Frito-Lay division and a 2% increase the company's North America beverages division.

PepsiCo reported a first-quarter profit of $1.41 billion, or $1 a share, up from $1.34 billion, or 94 cents a share, in the comparable quarter a year earlier.

The company affirmed its guidance for the full-year, which anticipates higher sales but lower profits as it follows through on a new strategy by CEO Ramon Laguarta.

In February, PepsiCo said it plans to shed jobs and close plants over the next few years as part of a restructuring program. For 2019, the company said it would make substantial investments in areas that would boost its manufacturing capacity, advertising and marketing.

Write to Jennifer Maloney at and Kimberly Chin at


(END) Dow Jones Newswires

April 17, 2019 11:28 ET (15:28 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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