Bottles of PepsiCo Inc. brand Pepsi Soda for sale in a grocery store in Baghdad, Kentucky, the United States, on Friday, April 9, 2021.
Luke Sharrett | Bloomberg | Getty Images
PepsiCo announced Tuesday that quarterly sales were up more than 20% year over year as restaurant demand for its beverages returned, causing a blow to the bottom line.
The company also raised its outlook for adjusted earnings per share growth for the full year.
In pre-market trading, the company’s shares rose up to 2%.
Here’s what the company said, relative to Wall Street expectations, based on an analyst survey by Refinitiv:
- Earnings per share: adjusted $ 1.72 versus expected $ 1.53
- Revenue: $ 19.22 billion versus $ 17.96 billion expected
Pepsi reported net income of $ 2.36 billion, or $ 1.70 per share, for the second quarter, up from $ 1.65 billion or $ 1.18 per share last year.
Without items, the company earned $ 1.72 per share, beating the $ 1.53 per share that Refinitiv polled analysts had expected.
Net sales grew 20.5% year over year to $ 19.22 billion, beating expectations of $ 17.96 billion. Organic sales, which exclude the influence of foreign currencies, acquisitions and divestments, rose by 12.8%.
The company’s North American beverages business posted organic sales growth of 21%, the highest of any Pepsi business for the quarter. Beverage volumes rose 15% and food service revenues, which include sales to restaurants, stadiums, and universities, doubled for the quarter. In the previous year, the division’s organic sales decreased by 7%.
Frito-Lay North America, which includes brands such as Doritos and Cheetos, posted organic sales growth of 6%. Convenience stores and food service channels helped to increase sales as consumers became more mobile. The segment saw strong sales during the pandemic. A year ago, it posted 6% organic growth.
Quaker Foods North America’s business was the only business to experience declining organic sales. Volume was down 21%, which reduced organic sales by 14%. At the same time a year ago, the segment saw organic sales grow 23% as consumers ate more breakfast at home, which boosted demand for maple syrup and oatmeal. Before the pandemic, it was the weakest part of Pepsi’s business.
After such a strong quarter, the company now expects currency-neutral earnings per share growth of 11%, above its previous forecast of high-single-digit growth. Analysts had expected earnings to grow 7.2% for the full year. Pepsi also cut its forecast for organic sales growth in 2021 from a mid-single-digit figure to 6%.
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