PepsiCo, Inc. (NASDAQ: PEP) stock fell 0.35% on July 8th, 2019 and continued its bearish momentum on July 9th, 2019 (As of 9:51 am GMT-4; Source: Google finance). For FY 19, the company expects the full-year organic revenue growth to be 4 percent and a decline in core constant currency EPS of approximately 1 percent, which incorporates lapping a number of 2018 of strategic asset-sale and refranchising gains, the expected increased core effective tax rate, and expected 2019 incremental investments to strengthen the business. The company expects approximately $9 billion in cash from operating activities and free cash flow of approximately $5 billion, which assumes net capital spending of approximately $4.5 billion. Total cash returns to shareholders is expected to be of approximately $8 billion, comprised of dividends of approximately $5 billion and share repurchases of approximately $3 billion
On the other hand, for the second quarter of FY 19, Net income attributable to the company rose to $2.04 billion from $1.82 billion, a year earlier.
Moreover, PepsiCo’s North American beverage unit got a boost in the second quarter from its water brands, including its LaCroix competitor Bubly, which helped offset volume declines in Gatorade and soda. Overall, the unit’s sales were up 2.5%, boosted by higher prices even as volume slipped. The company has also benefited from higher prices in the U.S. on its chips and snacks, which have helped lift revenue at its Frito-Lay unit despite sluggish volume growth. PepsiCo has been cutting costs, including reducing head count, as it tries to increase profit amid higher commodity costs and headwinds from foreign currency.
Meanwhile, PEP had launched berry, lime and mango flavored sodas in 12-ounce cans earlier this year and introduced Bubly sparkling water in fruity flavors as well as healthier chips such as Bare’s apple chips and Off the Eaten Path’s veggie crisps.
PEP in the second quarter of FY 19 has reported the adjusted earnings per share of $1.54, while adjusted revenue growth of 2.2 percent to $16.45 billion in the second quarter of FY 19. Organic revenue, which excludes the effect of currency fluctuations and acquisitions, increased 4.5%. Frito-Lay revenues, which along with the company’s other snacks businesses, comprise more than half of the group’s collective top line, rose 4.5% to $4.01 billion, while north American beverage sales rose 2.5% to $5.322 billion.