PepsiCo Posts Higher Quarterly Sales, Withdraws Guidance -- Update

By Dave Sebastian 

PepsiCo Inc. posted higher sales for the first quarter of the year but withdrew its full-year guidance as it faces uncertainty amid the coronavirus pandemic.

The beverage giant on Tuesday said sales rose 7.7% from a year ago to $13.88 billion for the quarter. Analysts polled by FactSet were expecting $13.19 billion.

The company's organic revenue, which strips out the effect of currency swings and acquisitions, grew 7.9% for the first three months of the year.

"There is still a great deal of uncertainty that exists in relation to COVID-19, including how geographies, retail channels and consumer behaviors will evolve over time," Chairman and Chief Executive Ramon Laguarta said in prepared remarks.

Revenue at its North American beverage division, the company's biggest contributor, rose 7.3% to $4.84 billion.

In its Frito-Lay North America division, which produces potato chips and other snacks, sales rose 6.8% to $4.07 billion. Sales at Quaker Foods North America rose 6.7% to $634 million.

Latin America sales rose 5.6%, Europe sales rose 13.5% and sales in the Asia-Pacific, Australia, New Zealand and China region rose 5.7%. In Africa, the Middle East and South Asia, sales rose 9%.

Net income fell to $1.34 billion, or 96 cents a share, from $1.41 billion, or $1 a share, in the comparable quarter last year.

Adjusted earnings were $1.07 a share, ahead of the $1.03 a share analysts were looking for.

The company said it continues to expect paying $5.5 billion in dividends for the year and buying back $2 billion in shares. Pepsi sees a three- to four-percentage-point foreign-exchange translation effect to hurt its revenue and adjusted earnings for the year.

Pepsi also closed its acquisition of Rockstar Energy Beverages for $3.85 billion, in a move to expand the company's presence in the fast-growing energy-drink category. The company already distributes Rockstar's energy drinks.

Write to Dave Sebastian at [e-mail]

(END) Dow Jones Newswires

April 28, 2020 07:04 ET (11:04 GMT)

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