PepsiCo on Wednesday reported quarterly earnings and revenue that topped the analyst's expectations, thanks to continued growth internationally and its Frito-Lay snack business.
The Frito-Lay owner reported a fiscal first-quarter net income of $ 1.41 billion, or $ 1 per share, up from $ 1.34 billion, or 94 cents per share, a year earlier.
Excluding restructuring and impairment charges , tax profits and other items, PepsiCo earned 97 cents per share, topping the 92 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 2.6% to $ 12.88 billion, with a net expectations of $ 12.70 billion. Frito-Lay was the standout this quarter with sales growth of 5.5% from last year. PepsiCo has been investing in its snack business by adapting its portfolio to changing consumer tastes, like its acquisition of healthy snackmaker Bare Foods.
The company has effective net pricing to thank for some of its revenue growth. For example, the sales volume for its North American beverage business dropped by 2% in the second quarter that ended March 23, but PepsiCo raised prices by 4%, resulting in a 2% sales increase.
Organic revenue, which strips out the impact of acquisitions, divestitures and foreign exchange, grew by 5.2 percent during the quarter. Laguarta blamed the currency headwinds for the difference between overall sales growth and organic growth. Like the rival of Coca-Cola, the global penalty giant is facing foreign exchange pressure.
Its international segments saw the highest organic revenue growth.
On Wednesday, the company reiterated its 2019 targets, including 4 percent organic income growth and earnings per share of $ 5.50.
Last quarter, PepsiCo misses Wall Street's expectations for its 2019 outlook when it forecasts declining earnings as it spends more on marketing and advertising to boost sales. To balance those investments, the soft-drink maker is planning to slash at least $ 1 billion in costs each year through 2023, which will include layoffs in jobs that can be replaced by automation.