PepsiCo recorded a 2.2% increase in its second-quarter net revenue compared to the same period last year, as it continues to be boosted by snack sales in North America.
The maker of Doritos, Mountain Dew and Gatorade recorded net revenue of $16.45 billion in the 12 weeks to 15 June. Operating profit was down 9.9% to $2.73 billion.
In PepsiCo beverages North America, the firm’s largest unit, net revenue was up 2.5%. However, volumes in the division were down 2%, driven by a 3% decline in carbonated soft drink volume and a 1% decline in non-carbonated beverage volume.
In Frito-Lay North America – which includes PepsiCo’s branded food and snack businesses in the US and Canada, and represents the company’s second largest division – net revenue grew 4.5% and volumes were up slightly. Volume growth reflects low-single-digit growth in Cheetos and Doritos products.
Ramon Laguarta, who replaced Indra Nooyi as PepsiCo CEO in October, said: “We are pleased with our results for the second quarter. While adverse foreign exchange translation negatively impacted our reported net revenue performance, our organic revenue growth was 4.5% in the quarter.”
PepsiCo CEO Ramon Laguarta.
He added: “We are also pleased with the progress on our priorities to make PepsiCo a faster, stronger and better company by building new capabilities, strengthening our brands, adding capacity to grow and transforming our culture.
“Our performance for the first half and the progress we are making on our strategic priorities give us increased confidence in achieving the 2019 financial targets we communicated earlier this year.”
During the quarter, PepsiCo announced plans to invest approximately $4 billion over 2019-2020 to significantly expand its operations in Mexico, its second largest market worldwide.
Last week, the company formed a strategic partnership with Lavazza, which will see Lavazza launch its first ready-to-drink iced coffee product in the UK.
For its 2019 full year, PepsiCo expects organic revenue growth to be at 4%.
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