PepsiCo, Inc. (NASDAQ:PEP) raises revenue forecast

PepsiCo, Inc. (NASDAQ:PEP) stock rose 0.78% (As on July 13, 12:57:00 AM UTC-4, Source: Google Finance) after the company raised its full-year revenue forecast and plans to increase prices further in the coming months, with the beverage giant seeing little impact on demand for its sodas and snacks despite decades-high inflation. PepsiCo recorded a $1.4 billion charge in the second quarter, primarily related to the write down of some assets due to the Russia-Ukraine conflict. Pandemic-induced disruptions to the global supply chain and surging raw material costs forced PepsiCo, like other packaged food makers, to increases prices for its products, and some retailers have pushed back against those hikes citing waning consumer demand. The company delivered 13.0 percent organic revenue growth in the second quarter of FY 22 compared to 12.8 percent organic revenue growth delivered during the second quarter of 2021. The North America and International businesses delivered 11 percent and 15 percent organic revenue growth, respectively.

PEP in the second quarter of FY 22 has reported the adjusted earnings per share of $1.86, beating the analysts’ estimates for the adjusted earnings per share of $1.74. The company had reported the adjusted revenue growth of 5.2 percent to $20.23 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $19.51 billion, according to Refinitiv data.

PepsiCo expects fiscal 2022 core revenue to rise 10%, compared with a previous forecast of an 8% increase. The company was also looking at cutting costs with cheaper packaging and a more cautious hiring approach. For 2022, the Company continues to expect an 8 percent increase in core constant currency EPS, a core annual effective tax rate of 20 percent; and total cash returns to shareholders of approximately $7.7 billion, comprised of dividends of $6.2 billion and share repurchases of $1.5 billion. The guidance imply 2022 core EPS of $6.63. The company anticipates North American beverages and convenient foods businesses to remain resilient and perform well.

Meanwhile, the company is expanding the positive product choices with the reduction of saturated fats, added sugars and sodium by incorporating healthier oils into the convenient foods portfolio, extending our zero-sugar offerings, and utilizing the variety packs to satisfy consumer demand for portion control, convenience and value. The company plans a new electric fleet for Frito-Lay North America which will help us advance the goal to achieve net-zero emissions across the value chain by 2040.

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