Reportedly, PepsiCo’s earnings for 2023 along with revenue, quarterly beat analysts’ expectations and raised its outlook for its full-year earnings. PepsiCo Inc. (PEP.O) said on Tuesday it planned “modest” price increase next year as demand held up despite multiple hikes. This has prompted the snacks and beverages giant PepsiCo to raise its profit earning forecast for 2023 for a third straight time.
PepsiCo earnings per share
PepsiCo shares, which owns brands including Mirinda, and Gatorade, rose nearly 2% in early trading after Q3 profit beat estimates. PepsiCo reported third-quarter net earning attributable to the company of $3.09 billion, or $2.24 per share, up from $2.7 billion, or $1.95 per share, a year earlier.
PepsiCo kicks off quarterly earnings from consumer goods firms against the backdrop of rising concerns that multiple price hikes could crimp demand, as well as countries like France pushing for price cuts to help rein in inflation
As we get into next year there will be some modest level of price increases coming,” said Chief Financial Officer Hugh Johnston.
PepsiCo earnings 2023
- Earnings per share: $2.25 adjusted vs. $2.15 expected
- Revenue: $23.45 billion vs. $23.39 billion expected
PepsiCo earnings for 2023, shows constant currency earnings per share growth of 13%, up from its prior forecast of 12%. It’s the third consecutive quarter that the snacking and beverage giant has hiked its full-year forecast.
PepsiCo’s average prices jumped 11% in the quarter ended Sep 9, while organic volume slipped 2.5%.
PepsiCo price increase
PepsiCo’s profit margin gives it the room to either keep the prices the same or maybe even reduce them but clearly in the short term the company has not gotten to that point where it feels the need to reduce prices drastically, said Brian Mulberry, client portfolio manager at Zacks Investment Management.
PepsiCo has benefited along with its rival Coca-Cola from their near-domination of the global carbonated drinks market, as well as cost-conscious consumers spending on products categorized as “affordable luxuries”.
Meanwhile, Johnston said the company was “not seeing any impact” yet from the popularity of weight-loss drugs that could alter consumption patterns.
PepsiCo’s food divisions performed better than beverages
PepsiCo’s North American beverages unit reported volume declines of 6%. CEO Ramon Laguarta said the company has pruned some promotions, such as for its bottled water business, in order to preserve margins. But those deals drove volume for the drinks, gains that disappeared without the promotions.
The company’s North American food divisions performed better than the beverages unit did. Quaker Foods North America’s volume rose 1%, while Frito-Lay North America’s volume was flat. Quaker Foods’ brands also gained market share in key categories, such as pancake mix and syrup, executives said in prepared remarks.
Is surge in sliming drugs a worry?
The surge in demand for such drugs, which include Wegovy and Ozempic, has triggered worries about a likely hit to sales for major packaged food companies. Though PepsiCo says appetite-suppressing drugs haven’t affected sales of its snacks and sodas so far, though the company is focused on package size and consumers’ portion-control concerns as it aims to reach its raised annual forecast.
PepsiCo forecast
Adjusted profit of $2.25 per share topped expectations of $2.15, according to LSEG data.
PepsiCo forecast fiscal 2023 core earnings per share of $7.54, up from $7.47 earlier, while maintaining its annual organic revenue growth forecast at 10%.
Looking to 2024, Pepsi anticipates organic revenue growth on the high end of 4% to 6% and core constant currency earnings per share growth in the high single digits.
PepsiCo shares
PepsiCo shares rose 2% in premarket trading.
