PepsiCo profit jumps as productivity rises


PepsiCo (PEP) saw its profit increase 31% in the fourth quarter as the company benefited from increased productivity across its brands.

PepsiCo, which owns brands including Doritos, Gatorade and Lays potato chips along with its namesake soda, saw sales increase within the Frito-Lay and North America Beverages divisions as it implemented several initiatives to compel customers to spend more. For example, it rolled out a type of Mountain Dew sold in glass bottles at a higher price point and now has more bag sizes available for Lays.

CEO Indra Nooyi also pointed out on a call with analysts that Gatorade did well due to last year’s unusually warm weather and an expanded product line that targets different phases of athletic performance.

“The fact that so many athletes are choosing Gatorade now is allowing Gatorade to far outdistance any emerging competitors in the space,” she said.

Sales fell for Quaker Foods as well as in the company’s overseas markets due to foreign currency fluctuations. PepsiCo shares fell slightly by 0.9% in pre-market trading on the report.

The results reported Thursday were in line with analyst expectations. Pepsi had earnings per share of $1.06, which is what analysts forecasted, according to S&P Global Market Intelligence. Its net income hit $1.72 billion, up from $1.31 billion in the year-ago quarter. The company’s revenue of $18.59 billion was slightly above analyst expectations for $18.51 billion, but was down 7% from $19.95 billion in the same period in 2014 due to foreign exchange rates.

Hadley Malcolm

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