AP – PepsiCo’s revenue rose seven per cent in the third quarter despite lower demand as the company continued to hike prices.
Pepsi raised prices 11 per cent in the July-September period, the seventh straight quarter that the Purchase, New York, company has increased prices by double-digits. Sales volumes fell 2.5 per cent.
PepsiCo has said its price hikes reflect the higher cost of ingredients like cooking oil.
The company says it’s attracting customers with new items, like Doritos Spicy Pineapple Jalapeno chips, and advertising, which is lifting brands like Gatorade.
Still, Frito-Lay North America sales volumes dropped 0.5 per cent during the July-September period as net prices rose eight per cent. North American beverage sales volumes dropped six per cent as prices rose 12 per cent. Sales volumes in Europe were flat. Sales volumes in Latin America dropped five per cent.
Net pricing includes price hikes as well as changes in the mix of products sold and smaller package sizes. In prepared remarks yesterday, PepsiCo said consumers are gravitating toward smaller packages for convenience and portion control.
Net revenue was USD23.4 billion, the company said yesterday. That was in line with Wall Street’s expectations, according to analysts polled by FactSet. Net income for Pepsi rose 14 per cent to USD3.1 billion, or USD2.24 per share. That beat the USD2.15 per share that analysts had forecast.
Pepsi now expects its full-year earnings per share to increase 13 per cent, up from previous projections of 12 per cent, due to the strength of its sales and cost-cutting efforts.
