What is PepsiCo's updated financial outlook for fiscal year 2014?

PepsiCo reiterated its expectation for 8% core constant currency EPS growth in fiscal 2014. However, the company anticipates that foreign exchange translation will have an unfavorable impact of approximately 4 percentage points on this growth. Organic revenue is expected to grow in the mid-single digits, also facing an approximate 3 percentage point headwind from foreign exchange.

What are the main risks highlighted in this filing?

The filing emphasizes that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Key risk factors mentioned include changes in consumer demand, the legal and regulatory environment, competition, economic conditions, raw material costs, supply chain disruptions, reputational damage, currency fluctuations, and cybersecurity threats.

Why does PepsiCo provide 'core' and 'organic' financial measures, and how are they different from GAAP?

PepsiCo uses non-GAAP measures like 'core' and 'organic' results because management believes they are more indicative of ongoing performance and reflect how operational results and trends are evaluated. 'Core' results exclude certain items like commodity mark-to-market impacts and restructuring charges. 'Organic' revenue adjusts for acquisitions, divestitures, structural changes, and foreign exchange translation. These measures are not substitutes for GAAP reporting but are provided to offer additional insight into the business's operational performance.

What specific items were detailed in the reconciliation of GAAP and Non-GAAP information?

The reconciliation provided details on specific items that impacted prior fiscal periods, including commodity mark-to-market net losses ($72 million in 2013), merger and integration charges related to the Wimm-Bill-Dann Foods OJSC acquisition ($10 million in 2013), significant restructuring and impairment charges related to multi-year productivity plans ($53 million for the 2014 plan and $110 million for the 2012 plan in 2013), a charge for the Venezuela currency devaluation ($111 million in 2013), and a non-cash tax benefit from an IRS agreement ($209 million in 2013).

PEP 8-K: Regulation FD

Summary

PepsiCo, Inc. (PEP) filed an 8-K on September 2, 2014, primarily to provide updated financial guidance and an overview of upcoming investor presentations. The company reiterated its fiscal 2014 guidance, expecting 8% core constant currency Earnings Per Share (EPS) growth. However, it anticipates a significant negative impact from foreign exchange translation, estimated at approximately 4 percentage points on full-year core EPS growth. Organic revenue growth is projected to be in the mid-single digits, consistent with long-term targets, but also faces an approximate 3 percentage point headwind from foreign exchange. The filing also detailed restructuring charges related to ongoing productivity plans and one-time items impacting prior fiscal year results, such as the Venezuela currency devaluation and a tax benefit from an IRS agreement. Management highlighted upcoming presentations by key executives from PepsiCo Americas Beverages and Frito-Lay North America at the Barclays Back-to-School Consumer Conference. This 8-K serves as a means for PepsiCo to communicate forward-looking statements and financial expectations to investors in compliance with Regulation FD, emphasizing that these projections are subject to inherent risks and uncertainties. Investors should note the significant impact of foreign currency fluctuations on reported results and the company's reliance on non-GAAP measures like "core" and "organic" for evaluating operational performance.

Key Highlights

1PepsiCo reiterated its fiscal 2014 guidance for 8% core constant currency EPS growth.
2Foreign exchange translation is expected to negatively impact full-year core EPS growth by approximately 4 percentage points.
3Organic revenue growth is projected in the mid-single digits for fiscal 2014.
4Foreign exchange is expected to negatively impact full-year net revenue growth by approximately 3 percentage points.
5The company announced upcoming presentations by senior executives at the Barclays Back-to-School Consumer Conference on September 3, 2014.
6Details on restructuring and impairment charges related to multi-year productivity plans (2014 and 2012) were provided.
7One-time charges impacting prior periods, including Venezuela currency devaluation and a tax benefit from an IRS agreement, were detailed in the reconciliation of GAAP and non-GAAP measures.

PEPSICO INC 8-K Report, Regulation FD Disclosure (Sep 2, 2014)

Summary

Key Highlights

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