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PepsiCo's Quarterly Profit Beats As Advertising Push Pays Off

PepsiCo Inc beat quarterly revenue and profit estimates on Thursday, as ramped up advertising and new low-calorie versions of Gatorade boosted demand for its beverages in North America.

The company said it expects to meet or exceed its fiscal 2019 organic revenue growth target of 4%.

Since taking the helm last October, chief executive officer Ramon Laguarta has charted out an aggressive spending plan to revive demand for out-of-favour sugary sodas and promote new flavours launched to cater to health-conscious consumers.

PepsiCo's advertising and marketing expenditure has jumped 12% so far this year as the company has splurged on new ads for its trademark Pepsi beverages, rounding off with a campaign centering around the National Football League's 100th anniversary.

Beverage Sales

Overall beverage sales in North America rose 3.4% in the third quarter to $5.64 billion (€6.33 billion), also helped by new low sugar and organic versions of the Gatorade sports drink.

Net revenue rose 4.3% to $17.19 billion (€19.31 billion) in the three months ended 7 September, beating analysts' estimates of $16.93 billion (€19.01 billion), according to IBES data from Refinitiv.

However, net income attributable to the company fell to $2.10 billion (€2.36 billion), or $1.49 per share, from $2.50 billion (€2.81 billion), or $1.75 per share, a year earlier.

Excluding one-time items, the company earned $1.56 per share, beating the average estimate of $1.50.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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