PEP PepsiCo Inc

By Allison Prang 

PepsiCo Inc.'s sales climbed in its latest quarter amid the company's efforts to invest in areas such as advertising and manufacturing.

The food-and-beverage company said organic revenue growth -- which strips out the effect of currency swings and acquisitions -- registered at 4.3% for the period. The company expects organic revenue growth of at least 4% for the year.

That metric has topped 4% every quarter so far in PepsiCo's fiscal year.

The company had $17.19 billion in net revenue for its fiscal third quarter ended Sept. 7, rising from $16.49 billion a year earlier on increases across all divisions. Analysts polled by FactSet were expecting revenue of $16.93 billion.

Shares of PepsiCo were ahead 3.8% midday.

Net revenue at its North American beverage division -- the company's biggest contributor -- rose 3.4%. Chief Executive Ramon Laguarta said on the company's earnings call that recent investments in advertising have helped the division.

Mr. Laguarta said Gatorade logged sales growth in the mid-single digits in the quarter. PepsiCo has tried to bolster the sports-drink brand, including last year's launch of sugar-free Gatorade Zero, and Mr. Laguarta said that effort continues.

PepsiCo earlier this year also rolled out three different flavors of Pepsi that are made with real juice.

Strong results from potato-chip brands helped propel a 5.5% rise in sales for PepsiCo's Frito-Lay North America division.

"The business is not only growing but winning in the marketplace versus competition," Mr. Laguarta said of the snack division.

PepsiCo's costs climbed as the company invested more in areas such as advertising and distribution. Selling, general and administrative costs rose more than 8% in the latest period.

In an interview Thursday, finance chief Hugh Johnston said spending on advertising was up 12% year to date with the investment spanning PepsiCo's different brands.

"We're seeing returns on the investment," Mr. Johnston said.

PepsiCo has also added new lines to the company's manufacturing plants, he said.

Net income fell to $2.1 billion in the third quarter, from $2.5 billion a year earlier. The company's income-tax provision almost tripled, contributing to the drop in profit.

Per share profit fell to $1.49 from $1.75. Adjusted earnings came to $1.56 a share, beating FactSet's analyst consensus estimate by 6 cents.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

October 03, 2019 13:06 ET (17:06 GMT)

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