Pepsi pops on Q2 earnings beat fueled by cost cuts and snacky revamps
Pepsi also forecast a smaller earnings dip this year as it focuses on more affordable pricing to keep shoppers loyal.
PepsiCo shares soared over 6% Thursday morning after the snacks and beverage giant topped Q2 earnings expectations even as overall name brand demand cools.
Adjusted earnings hit $2.12 per share, topping estimates of $2.03 by analysts polled on FactSet. Revenue came in at $22.73 billion, slightly ahead of forecasts even as overall food and beverage volumes continue to shrink in North America.
Pepsi Zero Sugar was a bright spot during the quarter, raking in double-digit volume growth. Pepsi is working on creating more value for customers with better price entry points and a revamp of its core snacks brands like Lay’s and Tostitos. It’s also staying the course on improving product visibility in-store and cutting costs. Pepsi shut down two of its food manufacturing plants during the latest quarter.
Looking ahead, Pepsi reaffirmed its full-year outlook of low single-digit organic revenue growth and now expects core EPS to decline 1.5% this year, a much smaller drop than the 3% it previously projected, thanks to changes in currency markets.
Despite today’s rally, Pepsi shares are still down about 4.5% year to date.
