The company posted first-quarter net revenues of $14.82 billion, up by 6.8%, benefitting from the acquisitions of Chinese snack company Be & Cheery and South Africa’s Pioneer Foods. Operating profit stood at $2.31 billion, up 20% from $1.92 billion last year.
“As we look ahead, we expect our organic revenue growth to accelerate in the second quarter and have greater confidence in delivering our financial guidance for the full year,” said Ramon Laguarta, PepsiCo chairman and CEO, and Hugh Johnston, PepsiCo vice chairman and CFO.
“We are assuming that vaccination efforts will accelerate and population mobility will improve. This should benefit the foodservice channel as and when travel, lodging, dining, education, and entertainment trends accelerate.”
PepsiCo’s Frito-Lay North America unit delivered 3% organic revenue growth at $4.24 billion, thanks to consumer-centric innovations such as Doritos 3D Crunch and Cheetos Crunch Pop Mix. In the quarter ended 20 March, organic revenue rose organically by 1% in the Quaker Foods America unit to $646 million.
PepsiCo Beverages North America sales went up 2% to $5.07 billion. Unit volumes declined in carbonated soft drinks and its water portfolio, however the firm witnessed strong performance by its Gatorade sports drinks. PepsiCo expects its biggest unit to perform well in the next quarter driven by innovation plans and expanded presence in the energy category.
“We also continue to expect our North America snacks business to remain resilient, while Quaker Foods North America moderates as it looks to capitalise on at-home breakfast and lite snack occasions, while other stay-at-home trends may ease as population mobility improves,” Laguarta and Johnston added.
Africa, Middle East and South Asia’s organic revenue went down 1% and Europe’s was unchanged from the prior year. In Latin America, PepsiCo’s organic revenue rose 3%, while its Asia Pacific, Australia and New Zealand and China Region segment jumped by 18% due to strong snack sales.
“We are pleased with our results for the first quarter as we successfully overcame challenges related to difficult year-over-year comparisons, uneven recoveries across many of our international markets and weather-related business disruptions in the US,” said Laguarta.
Following its first quarter results, PepsiCo has greater confidence in delivering its financial guidance for the full-year: mid-single-digit organic revenue growth.