Vending

PepsiCo Q2 2021 sales jump 20.5%, will raise prices

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July 13, 2021

PepsiCo Inc. will raise the prices of its products this year, the company said Tuesday after it raised its full-year earnings forecast on rising demand for its sodas from pandemic-weary people flocking to restaurants and theaters, according to a Reuters report.

Disruptions in global supply chains and rising demand has driven raw-material prices, forcing packaged food companies to pass on costs to consumers.

PepsiCo's price hikes, expected after Labor Day, will offset higher advertising and marketing costs, which increased 30% in the quarter as the company looked to take advantage of a reopening U.S. economy, CFO Hugh Johnston told Reuters.

Company revenue rose 20.5% from $15.6 billion in Q2 2020 to $19.22 billion in the quarter ending June 12, 2021, according to a press release.

Net income rose from $1.65 billion to $2.36 billion.

Net income attributable to PepsiCo common share rose 44% from $1.18 to $1.70 while Non-GAAP EPS rose 27% to $1.70.

Revenue for Frito Lay North America rose from $4.27 billion to $4.55 billion in the respective quarters.

Revenue for Quaker Foods North America fell from $664 million to $575 million, while revenue from PepsiCo Beverages North America rose from $4.9 billion to $6.16 billion.

"We are pleased with our second quarter results as we delivered very strong double-digit net revenue and earnings per share growth," Chairman and CEO Ramon Laguarta said in the release. "Given the strength of our results, we now expect our full year organic revenue to increase 6% and core constant currency earnings per share to increase 11%."

The $19.22 billion in revenue beat analyst expectations by $1.27 billion, while the Non-GAAP EPS of $1.72 beat expectations by 19 cents and the GAAP EPS of $1.70 beat expectations by 18 cents, according to Seeking Alpha.

Shares traded at $153.73 today against a 52-week range of $126.50-$153.86.

The company expects to deliver 6% organic revenue growth versus previous guidance of mid-single-digit growth and 11% core constant currency EPS growth for fiscal year 2021 versus previous guidance of high-single-digit growth.

For an update on how the coronavirus pandemic has affected convenience services, click here.