Bottles of PepsiCo Inc. brand Pepsi soda for sale at a grocery store in Bagdad, Kentucky, U.S., on Friday, April 9, 2021.
Luke Sharrett | Bloomberg | Getty Images
PepsiCo on Tuesday reported that its quarterly revenue rose more than 20% compared with the prior year as restaurant demand for its drinks returned, fueling an earnings beat.
The company also raised its outlook for its full-year adjusted earnings per share growth.
Shares of the company rose as much as 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.72 adjusted vs. $1.53 expected
- Revenue: $19.22 billion vs. $17.96 billion expected
Pepsi reported fiscal second-quarter net income of $2.36 billion, or $1.70 per share, up from $1.65 billion, or $1.18 per share, a year earlier.
Excluding items, the company earned $1.72 per share, beating the $1.53 per share expected by analysts surveyed by Refinitiv.
Net sales surged 20.5% year-over-year to $19.22 billion, topping expectations of $17.96 billion. Organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, rose 12.8%.
The company’s North American beverage business reported organic revenue growth of 21%, the highest of all of Pepsi’s divisions this quarter. Volume for its drinks soared 15%, and food service revenue, which includes sales to restaurants, stadiums and college campuses, doubled during the quarter. A year prior, the division’s organic revenue fell 7%.
Frito-Lay North America, which includes brands like Doritos and Cheetos, saw organic revenue growth of 6%. Convenience stores and food service channels helped boost sales as consumers became more mobile. The segment has seen strong sales throughout the pandemic. A year ago, it reported organic growth of 6%.
The Quaker Foods North America business was the only division to report sinking organic revenue. Its volume fell 21%, pushing organic revenue down by 14%. The same time a year ago, the segment saw organic sales surge 23% as consumers ate more breakfast at home, fueling demand for its maple syrup and oatmeal. Prior to the pandemic, it was the weakest part of Pepsi’s business.
On the heels of such a strong quarter, the company said that it now expects constant currency earnings per share growth of 11%, up from its prior forecast of high-single digit growth. Analysts were expecting full-year earnings growth of 7.2%. Pepsi also narrowed its forecast for 2021 organic revenue growth from mid-single digits to 6%.
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