PepsiCo predicts a smaller annual profit decrease because of strong US soda sales and rising interest in healthier beverages and a weaker dollar according to the company’s Thursday announcement. The Gatorade manufacturer experienced a 1.6% increase in premarket trading after delivering better-than-expected second-quarter financial results.
The Quaker Oats parent company has adapted to consumer demands for healthier beverages and affordable snacks through the addition of prebiotic soda Poppi and new Lay’s and Doritos flavors. The company has implemented multiple price reduction strategies to draw budget-conscious customers after maintaining elevated prices for multiple years.
The dollar’s strength during the first part of the year was expected to negatively impact international revenue which makes up 40% of total sales at PepsiCo. The dollar’s recent depreciation has reduced the pressure on earnings. CEO Ramon Laguarta announced that the company now predicts a 1.5% decrease in full-year core earnings per share instead of the previously forecasted 3% decline.
The North American beverage segment achieved a 1% revenue increase during Q2 following a 2% decline in the previous quarter. The company achieved revenue growth of 1% which reached $22.73 billion above market predictions. The company delivered adjusted earnings of $2.12 per share which exceeded analyst predictions of $2.03 while demonstrating strength in the face of market changes.
