Summary
PepsiCo Inc.'s Q3 2016 filing shows a mixed financial performance for the 36 weeks ended September 3, 2016, compared to the same period in 2015. While consolidated net revenue saw a slight decline of 3% to $43.3 billion, operating profit experienced a significant increase of 21% to $7.4 billion. This growth was largely driven by the absence of significant impairment charges related to Venezuela in the prior year, which heavily impacted the previous period's results. Excluding these "items affecting comparability," operating profit still showed a healthy increase. The company's performance was influenced by several factors, including volume growth in key segments like Frito-Lay North America and North America Beverages, offset by declines in Latin America due to its deconsolidation and unfavorable foreign exchange impacts. Strategic cost reductions and productivity initiatives contributed positively to profitability. Investors should note the ongoing focus on returning capital to shareholders through dividends and share repurchases, which remained a priority.
Financial Highlights
50 data points| Revenue | $16.03B |
| Cost of Revenue | $7.28B |
| Gross Profit | $8.74B |
| SG&A Expenses | $5.90B |
| Operating Income | $2.82B |
| Interest Expense | $247.00M |
| Net Income | $1.99B |
| EPS (Basic) | $1.38 |
| EPS (Diluted) | $1.37 |
| Shares Outstanding (Basic) | 1.44B |
| Shares Outstanding (Diluted) | 1.45B |
Key Highlights
- 1Consolidated net revenue for the 36 weeks ended September 3, 2016, decreased by 3% to $43.3 billion compared to the prior year.
- 2Operating profit for the 36 weeks ended September 3, 2016, increased by 21% to $7.4 billion, significantly influenced by the absence of large impairment charges from the prior year related to Venezuela.
- 3Frito-Lay North America (FLNA) demonstrated strong performance with a 3% increase in net revenue and an 8% increase in operating profit for the 36-week period.
- 4North America Beverages (NAB) saw a 2% increase in net revenue and a 6% increase in operating profit for the 36-week period, driven by growth in non-carbonated beverages.
- 5Latin America's net revenue decreased by 24% for the 36-week period, significantly impacted by the deconsolidation of Venezuelan businesses and unfavorable foreign exchange.
- 6The company returned $5.1 billion in free cash flow to shareholders through dividends and share repurchases during the 36 weeks ended September 3, 2016.
- 7The report highlights ongoing productivity initiatives and cost reduction efforts contributing to improved profitability.