Pepsi soft drinks are displayed in a supermarket in San Francisco, California.
Justin Sullivan | Getty Images
PepsiCo reported on Thursday that fourth-quarter earnings were higher than estimates, fueled by pandemic snacks and higher sales of beverages such as Gatorade Zero and Bubly sparkling water.
After the strong quarter, the owner of Frito-Lay said he expects his results for 2021 to meet long-term financial goals.
The company’s stock fell less than 1% in premarket trading.
This is what the company reported compared to what Wall Street expected, based on an analyst survey by Refinitiv:
- Earnings per share: $ 1.47, adjusted, vs. Expected $ 1.46
- Revenue: $ 22.46 billion vs. $ 21.78 billion expected
The company reported fourth-quarter net profit of $ 1.85 billion, or $ 1.33 per share, compared to $ 1.77 billion or $ 1.26 per share a year earlier.
Excluding items, Pepsi earned $ 1.47 per share, beating the $ 1.46 per share expected by analysts polled by Refinitiv.
Net sales increased 8.8% to $ 22.46 billion, exceeding expectations of $ 21.78 billion. The company’s organic sales, which exclude the impact of foreign exchange, acquisitions and divestments, grew by 5.7%.
Frito-Lay North America grew its organic sales by 5% during the quarter. Tostitos and Cheetos were among the brands consumers sought out in the supermarket when looking for snacks to take at home.
Quaker Foods organic sales were up 8%. Since many consumers still work from home, they buy maple syrup and pancake mix for breakfast. On Tuesday, Pepsi renamed its Aunt Jemima brand to Pearl Milling Company after saying in June that the character was based on a racial stereotype.
The North American beverages business grew organic sales by 5.5%. Pepsi typically receives less of its sales from outside the home than its rival Coca-Cola, so the segment’s organic sales turned positive in the third quarter. Gatorade Zero, Bubly, and the Starbucks-branded coffee drinks added to sales.
In 2021, Pepsi expects mid-single-digit organic sales growth and high-single-digit core earnings per share growth, assuming constant exchange rates. The company is also increasing its dividend by 5% starting in June.
“For 2021, we plan for our organic revenues and the growth of our core earnings in constant currency to be in line with our long-term goals,” CEO Ramon Laguarta said in a statement.
Read the full report here.