PepsiCo Sales Snap Back From Pandemic -- Update
October 01 2020 - 9:21AM
Dow Jones News
By Jennifer Maloney
People are grabbing a soda at the convenience store again.
PepsiCo Inc.'s revenue grew 5.3% for the latest quarter as its
beverage business rebounded and strong demand continued amid the
pandemic for its snacks and packaged foods.
"Mobility has clearly risen," the company's finance chief Hugh
Johnston said in an interview. "People are getting comfortable with
how to protect themselves in the new environment and live their
lives."
The company's namesake sodas and other drinks have been hurt
during the Covid-19 pandemic by the closures of offices and
restaurants, and a decline in trips to gas stations convenience
stores. But that changed in the third quarter: Revenue for
PepsiCo's North American beverage division climbed 6% to $5.96
billion, bouncing back from a decline of 7% in the previous
quarter.
Sales in restaurants and offices remain down "by a lot" but
revenue grew in convenience stores and gas stations, Mr. Johnston
said. The company's food business, meanwhile, has benefited as
Americans cook and snack more at home. Among the products selling
well: Tostitos, pancake mix and Cheetos Mac 'N Cheese.
In PepsiCo's Frito-Lay North America division, which makes
Doritos, Lays and other snacks, sales rose 7% to $4.4 billion in
the third quarter. And sales ticked up 6% for its Quaker Foods
North America division, which makes Rice-A-Roni and Aunt Jemima
products.
PepsiCo Thursday issued new financial guidance for the year,
after withdrawing its 2020 guidance in April. The company now
projects organic revenue growth, which adjusts for currency effects
and strips out acquisitions, of about 4%. On that basis, revenue
rose 4.2% in the quarter, which ended Sept. 5.
"The consumer trends in mobility and behavior around
away-from-home versus in-home are stable enough" to predict how the
company will fare through the end of the year, Mr. Johnston
said.
For the latest quarter, net income attributable to PepsiCo was
$2.29 billion, or $1.65 a share, up from $2.1 billion, or $1.49 a
share, last year. The results were better than analysts' forecasts
and PepsiCo shares rose slightly premarket.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
October 01, 2020 09:06 ET (13:06 GMT)
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