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near duopoly in the carbonated drinks market with Coca-Cola Co
helped PepsiCo raise prices over the last few quarters with
little pushback as it battles higher freight, commodity and
labor costs, as well as the impact of a stronger dollar on
international revenue.
PepsiCo expects inflationary pressures to persist in 2023 and
even though it sees resilient consumer demand, the company said
it was keeping an eye out for a shift in consumer spending.
The Frito-Lay maker forecast annual profit below Wall Street
estimates, signaling multiple price hikes were likely to dampen
demand for its sodas and snacks amid a cost-of-living crisis.
PepsiCo's shares rose 1.6% to $174 in premarket trading after it
also raised its annualized dividend by 10% to $5.06 per share.
The company's North America beverages unit, which houses brands
such as Mirinda, 7UP, and Gatorade, posted an organic revenue
growth of 10% in the fourth quarter on steady demand.
PepsiCo's Quaker Foods North America unit saw operating profit
fall about 3% to $188 million as higher production costs took a
bite out of margins.
On an adjusted basis, the company earned $1.67 per share in the
fourth quarter, beating estimates of $1.65, according to
Refinitiv data.
PepsiCo reported net revenue of about $28 billion, compared with
estimates of $26.84 billion.
The company's average prices jumped 16%, while organic volume
slipped 2%.
PepsiCo said it expects fiscal 2023 core constant currency
earnings of $7.20 per share, compared with estimates of $7.28.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by
Shounak Dasgupta)
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