PepsiCo Inc has raised its annual revenue and profit forecasts as the soda and snack giant benefits from multiple price increases to blunt rising costs.
The company's shares rose 2.3% in premarket trading as it also beat third-quarter revenue estimates.
Consumers, wrestling with a relentless surge in inflation, are eating more at home than at restaurants as they cut back on discretionary spending. A trend that has benefited US packaged food makers like PepsiCo that offer everything from snacks to sports drinks.
Global packaged food makers are also grappling with higher costs of many commodities and supply chain pressures that have been aggravated by the Russia-Ukraine conflict.
A near duopoly in the carbonated drinks market with Coca-Cola has helped PepsiCo raise prices with little push back while its strong market position in snacks has also buffered the company.
The company's net revenue rose about 9% to $21.97 billion (€22.6 billion) in the third quarter ended 3 September, beating analysts' estimates of $20.84 billion (€21.5 billion), according to IBES data from Refinitiv.
The price increases helped boost revenue across all its segments, especially its biggest two divisions of North America beverage and Frito-Lay.
The beverage business, which houses brands such as Mirinda, 7UP and Gatorade, posted a 1% increase in volume, signalling resilient demand from consumers.
PepsiCo said it expects 2022 organic revenue to rise 12%, compared to a prior forecast of a 10% increase. PepsiCo had raised its revenue expectations in April and July.
The company said it expects fiscal 2022 core constant currency earnings per share of about $6.73, compared to its previous forecast of $6.63.
Chairman and CEO Ramon Laguarta, commented, “Our strong results demonstrate that the investments we have made towards becoming an even faster, even stronger, and even better company with pep+ at the centre of everything we do are working.
"We are encouraged by the progress we are making on our strategic agenda, and remain committed to investing in our people, brands, supply chain, and go-to-market systems and winning in the marketplace.”
News by Reuters, additional reporting by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.