The fact that restaurants and other events are away from home was a huge boon for PepsiCo, which reported huge revenue growth in its beverage and snack business in the second quarter. However, the company warned that inflationary pressures could likely lead to higher prices.
The food and beverage giant, which hosts popular brands such as Pepsi, Mountain Dew, Doritos and Cheetos, said its second-quarter net income rose 20.5 percent year-on-year to $19.2 billion. By eliminating the effects of currency fluctuations and acquisitions, organic revenue grew by 12.8 percent. Its profit grew 43 percent from about $1.7 billion a year ago to approximately $2.4 billion.
In trading on Tuesday, PepsiCo’s stock rose 2.2 percent to $152.86, a record high and a gain of nearly 13 percent last year.
“You’re seeing an acceleration in our North American business, but also globally, as our ‘away from home’ beverage business grows much faster as stores open and people walk around,” said Ramon Laguarta, CEO and chairman of the board. PepsiCo told analysts in a phone call Tuesday morning.
The food and beverage giant said it expects strong revenue and earnings growth for the full year and has increased its full-year guidance for both targets. But the company noted several challenges on the horizon, including difficult retail comparisons as people move to consume more outside of the home, and pandemic restrictions around the world that continue to keep some people at home.
On top of that, executives said higher costs for raw materials, labor and freight will lead to higher prices for consumers after Labor Day, when PepsiCo traditionally changes prices.
“Is there a little more inflationary pressure out there? There is. Are we going to price it to deal with it? We certainly are,” said Hugh Johnston, PepsiCo’s chief financial officer.
Consumers are still adjusting to the post-pandemic environment in some parts of the world, but executives at PepsiCo said they expect several behavioral changes to continue, including healthier, lower-sugar options in drinks and snacks, and the ability to shop online. enters the stores.
Executives said employees are starting to trickle into offices in the United States, but homes will continue to be a hub where most of the workforce adapts to a hybrid model. “We see this as an opportunity for our snacks, breakfast and food business in general,” said Mr. Laguarta.