PepsiCo stock (NASDAQ:PEP) traded 1.2% higher in Tuesday’s premarket as the company raised its guidance for the year after beating estimates for the third quarter.
Hopes for a better year were kindled at the company as more people returned to restaurants and theaters, boosting demand for its snacks and beverages.
The company now expects full-year organic revenue to increase approximately 8% compared to its previous forecast of 6%.
The shares initially reacted negatively, amid signs of a slowdown in sales growth by volume, but quickly recovered to trade higher.
For the 12 weeks ended September 4, Pepsico recorded 9% organic revenue growth, comprising 4 percentage points of volume growth and a 5-percentage-point contribution from price and mix.
This compares to volume growth of 7 percent in the second quarter, when revenue rose 12.8%.
North America is the biggest market for Pepsico and that threw up some challenges for it.
PepsiCo Beverages North America delivered 7% organic revenue growth in the third quarter while Frito-Lay North America posted 5%. The two businesses in the region had grown by a far faster 21% and 6%, respectively, in the second quarter. International organic revenue grew 14%.
The company said it grew its market share in the carbonated soft drink category in North America, driven by trademark Mountain Dew. It also gained share in the ready-to-drink tea and water categories.
Pepsico’s third-quarter net revenue rose nearly 12% to $20.18 billion but profits fell as cost of sales rose more than 15% and selling expenses also went up by 10%. Profit fell 3% to $2.22 billion, but on a per share basis, it was higher than estimates.
News Source: Investing.com