Summary
PepsiCo, Inc. reported a net revenue of $17.85 billion for the 12 weeks ended March 25, 2023, representing a 10% increase compared to the same period in the prior year. However, operating profit saw a significant decrease of 50% to $2.63 billion. This decline is largely attributed to a substantial gain in the prior year related to the Juice Transaction, coupled with increased operating costs, including higher commodity prices and supply chain expenses. Despite the drop in reported operating profit, the company's 'core' operating profit, which excludes certain items affecting comparability, increased by 17% on a reported basis and 19% on a constant currency basis, indicating underlying business strength. While the company faced challenges from rising costs and unfavorable foreign exchange impacts in certain regions, effective net pricing and productivity savings helped to mitigate some of these pressures. The Frito-Lay North America and Quaker Foods North America segments showed robust net revenue growth, driven by pricing strategies. The international divisions also demonstrated resilience, with Latin America showing strong growth, though some regions like APAC experienced a slight decline in net revenue. The company continues to navigate a complex economic environment with a focus on pricing, efficiency, and strategic investments. From a cash flow perspective, the company used $0.39 billion in operating activities for the quarter, a slight increase in usage compared to the prior year. Investing activities used $0.53 billion, primarily for capital spending. Financing activities provided $0.78 billion, mainly from long-term debt issuances, while also returning capital to shareholders through $1.6 billion in dividend payments and $0.16 billion in share repurchases. The company reiterated its commitment to shareholder returns through dividends and share repurchases, alongside managing its debt obligations.
Financial Highlights
51 data points| Revenue | $17.85B |
| Cost of Revenue | $7.99B |
| Gross Profit | $9.86B |
| SG&A Expenses | $7.23B |
| Operating Income | $2.63B |
| Interest Expense | $200.00M |
| Net Income | $1.93B |
| EPS (Basic) | $1.40 |
| EPS (Diluted) | $1.40 |
| Shares Outstanding (Basic) | 1.38B |
| Shares Outstanding (Diluted) | 1.38B |
Key Highlights
- 1Net revenue increased by 10% to $17.85 billion for the 12 weeks ended March 25, 2023, driven by effective net pricing and organic growth across key segments.
- 2Reported operating profit decreased by 50% to $2.63 billion, largely due to a significant gain from the Juice Transaction in the prior year and increased operating costs.
- 3Core operating profit (non-GAAP) increased by 17% on a reported basis and 19% on a constant currency basis, signaling underlying business performance.
- 4Frito-Lay North America (FLNA) and Quaker Foods North America (QFNA) demonstrated strong net revenue growth of 15% and 9% respectively, driven by pricing.
- 5International segments showed varied performance, with Latin America up 21%, Europe up 5%, AMESA up 2%, and APAC down 1%, impacted by foreign exchange and regional economic conditions.
- 6The company experienced higher operating costs, including commodity, transportation, and labor expenses, which are expected to persist.
- 7Free cash flow was negative at $(0.95) billion for the quarter, with the company continuing to return capital to shareholders via dividends ($1.6 billion) and share repurchases ($0.16 billion).