Summary
PepsiCo, Inc. (PEP) reported its 2017 annual results, highlighting a year of growth driven by productivity initiatives and effective net pricing across its diverse portfolio of food and beverage brands. The company generated consolidated net revenue of $63.5 billion, a 1% increase over the prior year, with operating profit rising by 7% to $10.5 billion. Key drivers of this performance included significant cost reductions from productivity programs and strategic pricing actions. While the company navigated various business risks, including macroeconomic volatility and shifting consumer preferences towards healthier options, it demonstrated resilience. The report also detailed the impact of the Tax Cuts and Jobs Act of 2017, which resulted in a provisional net tax expense for the year. PepsiCo remains focused on its "Performance with Purpose" strategy, emphasizing innovation, e-commerce expansion, and sustainability initiatives to drive long-term shareholder value.
Financial Highlights
53 data points| Revenue | $63.52B |
| Cost of Revenue | $28.80B |
| Gross Profit | $34.73B |
| R&D Expenses | $737.00M |
| SG&A Expenses | $24.45B |
| Operating Income | $10.28B |
| Interest Expense | $1.15B |
| Net Income | $4.86B |
| EPS (Basic) | $3.40 |
| EPS (Diluted) | $3.38 |
| Shares Outstanding (Basic) | 1.43B |
| Shares Outstanding (Diluted) | 1.44B |
Key Highlights
- 1Consolidated net revenue increased by 1% to $63.5 billion, driven by effective net pricing and productivity initiatives.
- 2Operating profit grew by 7% to $10.5 billion, with operating margin improving by 1.0 percentage point, benefiting from cost reductions and strategic pricing.
- 3Frito-Lay North America (FLNA) saw a 2% net revenue increase, supported by effective net pricing, although volume saw a slight decline.
- 4North America Beverages (NAB) experienced a 2% decrease in net revenue, impacted by a volume decline in both carbonated soft drinks and non-carbonated beverages.
- 5Latin America's net revenue increased by 6%, primarily due to effective net pricing, despite volume declines.
- 6Europe Sub-Saharan Africa (ESSA) reported an 8% increase in net revenue, driven by volume growth, effective net pricing, and favorable foreign exchange.
- 7Asia, Middle East and North Africa (AMENA) saw a 5% decrease in net revenue, largely due to unfavorable foreign exchange, though snacks volume grew.
- 8The company repurchased $4.5 billion of its common stock during the fourth quarter of 2017, demonstrating a commitment to returning capital to shareholders.