PepsiCo raised its revenue outlook for the year Tuesday, as inflation pushed up prices and people paid more for its Doritos chips and Gatorade drinks
Expecting costs to rise even higher in the second half of the year, the global food and drink giant said it plans to keep shrinking product sizes and deploying other ways to manage rising costs.
Shares of the company rose 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: $1.86 adjusted vs. $1.74 expected
- Revenue: $20.23 billion vs. $19.51 billion expected
Pepsi reported second-quarter net income of $1.43 billion, or $1.03 per share, down from $2.36 billion, or $1.70 per share, a year earlier.
The company’s margins shrank as it faced higher freight and commodity costs during the quarter. CEO Ramon Laguarta said in prepared remarks that Pepsi is accelerating its cost management initiatives and using “mix and assortment solutions,” like smaller sizes for its variety packs. Johnston said the company may sometimes choose to reduce the number of chips in a bag rather than hike prices.