PepsiCo Inc (PEP.O) raised its full-year revenue forecast on Tuesday, as the opening of public venues including theaters and restaurants following the lifting of pandemic-induced restrictions boosted demand for its sodas and snacks.
The company said revenue from its North America Beverage unit, its largest business, rose 7 per cent in the third quarter on a double-digit increase in net revenue from food-service joints and strong demand for its Mountain Dew soft drink.
Revenue from the company’s Frito-Lay North America business also rose about 6 per cent in the quarter, signaling that pandemic driven demand for salty and savory snacks was still holding strong despite people starting to spend less time at home.
However, PepsiCo’s net attributable income fell about 3 per cent to $2.22 billion, due in part to higher distribution costs as it grappled with rising raw material prices and global supply chains disruptions, which have pressured profit margins at packaged food companies this year.
Net revenue rose 11.6 per cent to $20.19 billion in the quarter ended Sept. 4, above analysts’ estimates of $19.39 billion, according to IBES data from Refinitiv.
The company said it was expecting fiscal 2021 organic revenue to rise about 8 per cent, compared with its prior forecast of a 6 per cent increase.
Shares of PepsiCo, which in August announced a $3.3 billion deal to offload Tropicana and other juice brands in North America, were little changed in premarket trading.