Pepsico is on track to deliver about the same full-year revenues that it had expected before coronavirus shut down much of the world economy, helped by a recent recovery in sales of its soft drinks in corner shops and petrol stations.
The food and drinks company behind doritos crisps, tropicana juice and the eponymous fizzy beverage on thursday reinstated annual revenue guidance that it had scrapped at the onset of the pandemic. it predicted full-year revenues would rise about 4 per cent from 2019 on an organic basis.
Its been quite a roller-coaster of a year, but as we get towards the end, its coming out relatively close to where we expected at the beginning, said hugh johnston, chief financial officer. our categories have shown themselves to be resilient. people do need to eat and drink.
Despite the top-line strength, costs of dealing with covid-19 are expected to weigh on the companys full-year profitability.
Pepsico said it expected full-year core earnings per share to decline from $5.53 in 2019 to $5.50 in 2020. in february, it had set a target to increase annual core constant currency earnings per share by 7 per cent.
Restrictions to curb the spread of coronavirus have been a boon for pepsicos food business. consumers working and studying from home have been munching on snacks between meals more frequently, fuelling demand for products such as tostitos tortilla chips, walkers crisps and quaker porridge. the trend continued in the third quarter, when sales at the groups frito-lay and quaker units in north america both rose 6 per cent on an organic basis.
The pandemic has been tougher on pepsicos beverages business, whose brands include 7up and mountain dew. the business is reliant on out-of-home venues such as bars, restaurants, cinemas and stadiums. as well as the closure of such venues, sales have been hit by fewer visits to corner shops and petrol stations.
But the drinks business recovered in the third quarter. organic sales at the companys beverages division in north america rose 3 per cent, following a 7 per cent decline in the previous quarter.* pepsico said on thursday that sales had picked up strongly at convenience stores and petrol stations, while the decline in food service had moderated.
Overall, pepsico produced net revenues of $18.1bn in the 12 weeks to september 5, an increase from $17.2bn the same period one year ago. that equated to a 4 per cent rise on an organic basis. net income rose from $2.11bn to $2.31bn, equivalent to $1.65 per diluted share.
*this article has been amended to correct the figure for the second quarter