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Pepsi soft drinks are on display at a convenience store in San Francisco, California.
Justin Sullivan | Getty Images
PepsiCo raised its guidance for the full year on Tuesday after its quarterly earnings and revenue exceeded analysts’ expectations, despite higher costs and grunts in the supply chain.
Pepsi shares rose less than 1% in pre-market trading.
Executives said supply chain disruptions and inflationary pressure for labor, raw materials and transportation weighed on its third-quarter tax results.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts at Refinitiv:
- Earnings per share: $ 1.79 adjusted vs. $ 1.73 expected
- Turnover: $ 20.19 billion against $ 19.39 billion expected
For the quarter ended Sept. 4, net income fell to $ 2.22 billion, or $ 1.60 per share, from $ 2.29 billion, or $ 1.65 per share, a year earlier.
Excluding items, the food and beverage giant gained $ 1.79 per share, exceeding the $ 1.73 per share expected by analysts polled by Refinitiv.
Net sales rose 11.6% to $ 20.19 billion, beating expectations of $ 19.39 billion. The company’s organic revenue, which excludes the impact of acquisitions and divestitures, climbed 9% in the quarter.
Pepsi’s beverages business in North America reported organic revenue growth of 7% for the quarter. While organic unit sales increased 10% on a two-year basis, growth has moderated since rebounding 21% in the previous quarter. The company said it saw double-digit net revenue growth from its restaurant business, which includes sales to restaurants, stadiums and college campuses.
Frito-Lay saw its organic revenue increase by 5% as consumers maintained many of their snacking habits during a pandemic. Pepsi said it gained market share in the salty and savory snack categories during the quarter.
Quaker Foods North America, which has been Pepsi’s toughest business unit, saw organic revenue increase 1%. It was the only segment to record a decrease in volume, which excludes the impact of price changes, and recorded the largest drop in operating profit.
For the full year, Pepsi said it expects its organic revenue to grow 8%, up from its previous forecast of 6% growth. The company reiterated its forecast for constant currency earnings per share of 11% growth. Analysts were forecasting full-year profit growth of 13% and revenue increase of 9.5%.
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