PepsiCo has raised its full-revenue forecast, aided by higher prices and a rebound in demand for its products in the out-of-home market.
Currently, firms are grappling with higher costs on everything from aluminium cans to labour and shipping, due to pandemic-induced disruptions to the global supply chain, forcing the packaged food industry to raise product prices.
Potential Price Rise
PepsiCo has said it could potentially raise prices later in the year if costs climb more than expected, but analysts and companies, including arch rival Coca-Cola Co, have warned that demand will likely slow as inflation shows no sign of cooling.
The company also said it took a $241 million (€225.4 million) charge in the first quarter related to property, plant and equipment impairment, as well as inventory write-downs due to the Russia-Ukraine crisis.
Chairman and CEO Ramon Laguarta said, "I am very proud of how our people and business have performed while operating in a dynamic and complex environment due to the ongoing deadly conflict in Ukraine.
"The humanitarian impact is especially tragic and beyond what words can describe. Our priority continues to be the safety, well-being, and security of our Ukrainian associates and we join all those praying for peace."
The company said it now expects fiscal 2022 organic revenue to rise 8%, compared with its forecast of a 6% increase.
Pepsico's net revenue rose 9.3% to $16.20 billion (€15.2 million) in the first quarter ended 19 March, beating analysts' estimates of $15.54 billion (€14.5 billion), according to IBES data from Refinitiv.
Commenting on the company's performance, Laguarta said, "For the first quarter, we delivered strong results which reflect our presence in growing, global categories and the investments we have made towards becoming an even Faster, even Stronger, and even Better company with PepsiCo Positive (pep+) at the centre of everything we do. [...]
"Looking ahead, we will focus on controlling what we can, such as enhancing our focus on productivity and sharpening our revenue management capabilities, while also continuing to make the necessary long-term investments to fortify our businesses and win in the marketplace."