Following the earnings report, the shares of PepsiCo saw a price increase. Yesterday, PepsiCo stock closed the trading session at $161.36 per share. In the pre-market trade today, PepsiCo shares are 0.84% up, or at $162.71 per share.
PepsiCo (NASDAQ: PEP) has released its earnings report for the third quarter of 2023. One of the world’s largest food and beverage companies has managed to beat Wall Street’s estimates, delivering better-than-expected results. Due to great performance in Q3, PepsiCo has a positive 2023 full-year forecast.
PepsiCo Q3 2023 Earnings: Highlights
For the quarter that ended on September 30, PepsiCo generated $3.09 billion, up from $2.70 billion reported in the same quarter last year. The earnings per share totaled $2.24, up from $1.95 in last year’s third quarter. Notably, Wall Street’s forecast was $23.39 billion in revenue, or $2.15 per share.
The adjusted earnings of $3.11 billion or $2.25 per share were reported.
Further, net sales rose by 6.7% to $23.45 billion.
According to PepsiCo, the growth was driven by cost management initiatives aimed at maximizing labor efficiencies, unlocking capacity constraints, advancing digitalization across our organization, and minimizing areas of waste throughout the company’s value chain.
PepsiCo operates across the following segments:
- PepsiCo Beverages North America,
- Frito-Lay North America,
- Quaker Foods North America,
- Europe,
- Africa, Middle East, and South Asia,
- Latin America,
- Asia Pacific, Australia, New Zealand, and China.
The largest contributors to its total revenue are PepsiCo Beverages North America, Frito-Lay North America, and Europe.
For the third quarter of this year, PepsiCo Beverages North America (PBNA) generated $7.16 billion, which makes up a third of the total revenue. Frito-Lay North America (FLNA) delivered $5.95 billion, its net revenue grew by 7%, primarily driven by effective net pricing. Another $3.70 billion was reported by Europe, its net revenue increased 2% and was partially offset by a 10-percentage-point impact of unfavorable foreign exchange.
PepsiCo’s Full-Year Guidance
For the full 2023, PepsiCo is expecting strong results. Consistent with its previous guidance for 2023, the company is planning to achieve a 10% organic revenue growth, a core annual effective tax rate of 20%, and total cash returns to shareholders of approximately $7.7 billion, comprised of dividends of $6.7 billion and share repurchases of $1.0 billion.
Furthermore, PepsiCo is expecting an approximate 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates.
PepsiCo’s President and CEO Ramon Laguarta stated:
“We believe that our businesses can continue to perform well in the coming years with category growth normalizing, as we have made numerous investments in our brands, manufacturing capacity, go-to-market systems, supply chain, technology, and people, to execute against our strategic framework and modernize our company.”
Lagurta further added:
“Therefore, we expect our full-year 2024 organic revenue and core constant currency EPS growth to be towards the upper end of our long-term targets as we advance towards our vision to become the global leader in beverages and convenient foods by winning with pep+.”
Following the earnings report, the shares of PepsiCo saw a price increase. Yesterday, PepsiCo stock closed the trading session at $161.36 per share. In the pre-market trade today, PepsiCo shares are 0.84% up, or at $162.71 per share.
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