The beverage market has changed a lot over the last few years, as people have become health conscious and want more healthy drinks rather than the sugary ones. Thus, the beverage retailers have shifted their focus to making juices and other energy drinks for the customers. Further, this change in customers' preferences has resulted in lower sales of carbonated soft drinks.
However, PepsiCo (PEP) seems to be managing its way out as it registered a blockbuster third quarter. The recently reported numbers are way ahead of the Street's expectations, enabling the share prices to rise. Let us dig in deeper.
The impressive numbers
Sales jumped 2% to $17.2 billion, over last year's quarter. This was ahead of analysts' expectations of $17.1 billion. On an organic basis, revenue surged 3% as compared to the previous year. Ramped-up promotions, through advertisements and discounts, helped the company attract more customers. Also, an increase in product prices in the previous quarter drove the top line higher.
Going by the segments, snacks division is the most attractive segment for the retailer. Sales in the Frito Lay category jumped 3%, which helped in offsetting the weakness in other categories. But sales in the Quaker Food division declined 2%. The beverage segment reported flat sales since the decline in carbonated soft drinks was offset by growth in the non-carbonated drinks.
The beverage retailer also did well on the earnings front. The bottom line jumped 7% to $1.36 per share, much higher than the estimate of $1.29 per share. PepsiCo's cost cutting plan, initiated in 2012, and productivity gains helped earnings grow.
By the geography
Revenue from AMEA (Asia, Middle East & Africa) region grew 11% over last year. Performance in this segment was dr
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