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July 7, 2016

PepsiCo raises outlook on year-to-date performance

PepsiCo today (7 July) raised its growth outlook for the year after reporting higher than expected profit for the second quarter.

PepsiCo today (7 July) raised its growth outlook for the year after reporting higher than expected profit for the second quarter.

Net income attributable for the 12-week period to 11 June increased 1.3% to just over US$2bn. Chairman and CEO Indra Nooyi said the group was pleased with the results despite “what continues to be an incredibly volatile global macro environment”. 

Nooyi said: “While reported net revenue performance was negatively impacted by foreign exchange translation and the deconsolidation of our Venezuelan operations, we delivered balanced volume growth and positive price/mix driven by relentless execution of our commercial agenda and leading to solid organic revenue growth.”

A focus on pushing for greater efficiency throughout the group’s operations “contributed significantly to attractive margin expansion while we continued to invest in our business”, Npooyi said. “Based on our year-to-date performance, we are raising our full-year core constant currency EPS growth objective.”

Pepsico said EPS growth, excluding the Venezuela deconsolidation, would rise from 8% to 9%, with expected 2016 core earnings per share of US$4.71 compared to US$4.57 for 2015.

Net revenue for the 24 weeks to 11 June was US$27.25bn, down 3% on the same period in 2015. Operating profit for the 24 weeks was US$4.58bn, down 2% compared to last year.

PepsiCo’s Q2 results by division

Frito-Lay North America

Sales +3% to US$3.56bn Operating income +8% to US$1.08bn

Quaker Foods North America

Sales +3% to US$561m Operating income +11% to US$146m

Latin America

Sales -23% to US$1.7bn Operating income -32% to US$242m

Europe Sub-Saharan Africa

Sales -5% to US$2.66bn Operating income -4% to US$337m

Asia, Middle East and North Africa 

Sales -1.5% to US$1.74bn Operating income +3% to US$383m

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