Pepsi soft drinks are displayed at a convenience store in San Francisco, California.
Justin Sullivan | Getty Images
PepsiCo reported on Monday that its quarterly revenue decreased as fewer consumers bought their drinks at restaurants or convenience stores as a result of the coronavirus pandemic.
The company reported growth for its foods, such as Cheetos and oatmeal, during the quarter.
Pepsi said it would not present a prospect for the 2020 financial year at present, citing the continued volatility and uncertainty surrounding the pandemic.
Here’s what the company reported compared to what Wall Street expected, based on a survey by Refinitive analysts:
- Earnings per share: $ 1.32, adjusted against expected $ 1.25
- Revenue: $ 15.95 billion, compared to $ 15.38 billion expected
In the second quarter ending June 13, Pepsi reported net income of $ 1.65 billion, or $ 1.18 per share, down from $ 2.04 billion, or $ 1.44 a share, a year earlier. CEO Ramon Laguarta said the company spent nearly $ 400 million on pandemic-related costs, including personal protective equipment for employees.
Excluding items, the company earned $ 1.32 per share, beating $ 1.25 per share expected by analysts surveyed by Refinitiv.
Net sales fell 3.1% to $ 15.95 billion, topping expectations of $ 15.38 billion. The company’s organic revenue, which erases foreign currency, acquisitions and divestments, decreased by 0.3%.
PepsiCo’s North American beverage unit saw its organic revenue up 7%, despite growth in supermarkets and dollar stores. The closure of restaurants, movie theaters and sports arenas weighed on the business, but not all of its drinks suffered. Pepsi Zero Sugar and Bubly received a double-digit revenue increase.
Quaker Foods North America reported organic growth of 23% when consumers bought more oatmeal for breakfast and baking. Laguarta said consumers continued to buy these items even as the economies opened at the end of the quarter. The company has designed a marketing plan for the rest of the year to keep sales, including the launch of Cheetos mac and cheese.
Frito-Lay North America had organic sales growth of 6%.
Outside North America, the company reported declining organic sales in its Europe and Africa, Middle East and South Asia segments. Latin America’s organic revenue was lower, while the Asia-Pacific, Australia and New Zealand and China segments had organic sales growth of 15%.
Laguarta said the company saw signs of improvement in May and June as many economies began to reopen and consumers resumed some of their previous habits.