PepsiCo exceeded analytic expectations for the second fiscal quarter, despite the negative impact of the pandemic and the loss of certain distribution channels. The company reported some improvement following the easing of quarantine measures in the countries.
PepsiCo (NASDAQ: PEP) on Monday announced its second fiscal quarter ended June 30. The results exceeded the expectations of wall Street, but has been mixed. On the one hand, increased food and snacks, as consumers bought snacks for Breakfast and goods for cooking at home, on the other – decreased sales of beverages, as such large sales channels such as cafes, cinemas and gas stations suffered huge losses a large part of the quarter.
At the end of the 2nd quarter earnings per share of PepsiCo fell by 14% (compared with last year) to $1,32, this is, however, of $0.07 higher than the analytic estimate is $1.25. The sum of quarterly earnings (net income) fell by 20% to $1.65 billion, this measure was impacted by increased expenses, including more than $400 million of costs associated with the pandemic coronavirus.
The total income of the 2nd quarter, PepsiCo decreased 3% to $15,95 billion, but also was above average analytical evaluation $of 15.34 billion to See a history of revenue and profit PepsiCo for the last 2 years can link.
The details of the quarter
Sales of beverages decreased by 11% worldwide, while sales of the brands with foods and snacks partially offset this decline with growth of 4%.
The revenues of the largest divisions of PepsiCo beverages in North America fell 7% as the restaurants and other outlets were closed and sporting events were postponed.
Among the snacks segment, strong growth was not only well-known brands of the company, but also a new line of healthy snacks, such as a line of fruit chips Bare and Off The Eaten Path, as well as chips with black beans and chickpeas.
PepsiCo also noted that its merger with manufacturer of energy drinks Rockstar is nearing completion. Marketinfo.pro wrote about this acquisition PepsiCo in the article, “PepsiCo acquires manufacturer of energy drinks Rockstar for $3.85 billion.” The company plans to expand distribution of Rockstar across the country.
Brand of appliances for aerating the water at home SodaStream has also demonstrated double-digit growth.
Comments and forward-looking statements
Because of the difficulties of planning in an unstable environment during a pandemic, PepsiCo has not given forecasts for the year, but noted that trends and patterns in many channels of sales improved in may and June in both developed and emerging markets.
“We are seeing the continued development of sustainable consumer habits, considering that consumers spend more time at home. It benefits the sales of our homemade Breakfast, snacks and other products,” – said General Director of PepsiCo Ramon over thirty years.
He also noted that the demand of victims in the channels of distribution will improve in a more normal environment: “There are encouraging signals in the form of lower limits and the weakening of quarantine measures, mobility of the population also improved by the end of the quarter.”
According to LaGuerta, Pepsi has sufficient liquidity and flexibility to meet the needs of your business and return cash to shareholders. The amount of available cash and cash equivalents of the company amounts to almost $9 billion, while the total amount of debt is about $77 billion, but only $6.6 billion relates to short-term debt.
The company said that it plans this year to pay dividends of $5.5 billion to buy back shares for $2 billion.
Pepsi announced that it intends to use the current positive trends in the food segment over the next few months, including by increasing marketing costs and release new products such as Cheetos Mac ‘n Cheese this fall.
