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The
company's shares rose 2.3% in premarket trading as it also
trounced third-quarter revenue estimates.
Consumers, wrestling with a relentless surge in inflation, are
eating more at home than at restaurants as they cut back on
discretionary spending. A trend that has benefited U.S. packaged
food makers like PepsiCo that offer everything from snacks to
sports drinks.
Global packaged food makers are also grappling with higher costs
of many commodities and supply chain pressures that have been
aggravated by the Russia-Ukraine conflict.
A near-duopoly in the carbonated drinks market with Coca-Cola
has helped PepsiCo raise prices with little push back from
consumers, while its strong market position in snacks has also
buffered the company.
The price increases helped boost revenue across all its
segments, especially its biggest two divisions of North America
beverage and Frito-Lay.
The beverage business, which houses brands such as Mirinda, 7UP
and Gatorade, posted a 1% increase in volume, signaling
resilient demand from consumers.
The company said it expects 2022 organic revenue to rise 12%,
compared to a prior forecast of a 10% increase. PepsiCo had
raised its revenue expectations in April and July.
PepsiCo now expects fiscal 2022 core constant currency earnings
per share of about $6.73, compared to its previous forecast of
$6.63.
The company's net revenue rose about 9% to $21.97 billion in the
third quarter ended Sept. 3, beating analysts' estimates of
$20.84 billion, according to IBES data from Refinitiv.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by
Sriraj Kalluvila)
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