Massachusetts: PepsiCo reported better-than-expected quarterly net revenue yesterday as higher sales of snacks and non-fizzy beverages such as Gatorade in North America helped reduce the impact of a strong dollar.
PepsiCo increased its annual dividend to $3.01 per share from $2.81 and said it would return about $7 billion to shareholders this year, with about $3bn through buybacks.
However, the company forecast 2016 adjusted earnings below many analyst estimates, citing a strong dollar and the exclusion of its Venezuelan business from its financial statements.
Revenue from PepsiCo’s North American beverages business rose two per cent in the fourth quarter ended December 26, accounting for 31.5pc of total revenue.
Wells Fargo Securities said in a pre-earnings note that its research showed that PepsiCo’s beverage sales in US convenience stores rose 3.2pc in the quarter, helped by aggressive pricing and “solid” sales of Gatorade and Starbucks ready-to-drink coffee, which Pepsi distributes.
PepsiCo chief executive Indra Nooyi said warmer-than-usual weather also helped the company’s drinks business. “Gatorade does well when the temperature’s above normal,” she said.
Higher prices and reduced pack sizes helped boost revenue by 2pc in the company’s North America snack foods business, which includes Frito-lay and Doritos chips.
“Pricing in North America is a key bright spot for PEP,” Susquehanna analyst Pablo Zuanic wrote in a note.
&uuid=(email))