PepsiCo on Thursday reported fourth-quarter earnings that topped estimates, fuelled by pandemic snacking and higher sales of drinks like Gatorade Zero and Bubly sparkling water.
On the heels of the strong quarter, the Frito-Lay owner said that it expects its 2021 results to meet long-term financial targets.
Shares of the company fell less than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
· Earnings per share: $1.47, adjusted, vs. $1.46 expected
· Revenue: $22.46 billion vs. $21.78 billion expected
The company reported fiscal fourth-quarter net income of $1.85 billion, or $1.33 per share, up from $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 surveyed by Refinitiv.
Net sales rose 8.8% to $22.46 billion, topping expectations of $21.78 billion. The company’s organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, grew by 5.7%.
Frito-Lay North America saw its organic revenue grow 5% during the quarter. Tostitos and Cheetos were among the brands that consumers reached for at the grocery store when looking for at-home snacks.
Quaker Foods’ organic revenue increased by 8%. As many consumers still work from home, they’ve turned to buying 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.
Its North American beverage unit saw its organic sales rise 5.5%. Pepsi typically receives less of its sales from away-from-home occasions than rival Coca-Cola, so the segment’s organic revenue turned positive in the third quarter. Gatorade Zero, Bubly and its Starbucks-branded coffee drinks helped drive sales.
In 2021, Pepsi is anticipating mid-single digit growth in organic revenue and high-single digit growth in core earnings per share, which assumes constant foreign currency exchange rates. The company is also hiking its dividend by 5%, starting in June.
“For 2021, we are planning for our organic revenue and core constant currency EPS growth to be consistent with our long-term objectives,” CEO Ramon Laguarta said in a statement.