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$PEP's revenue from North America Beverages (NAB) rose by 1%, on productivity gains, lower raw material costs, favorable settlements of promotional spending accruals and insurance adjustments. Revenue from Europe Sub-Saharan Africa (ESSA) slid by 5% on higher raw material costs, operating cost inflation, higher expenses and adverse FX translation.
$YUM has more than doubled its system sales since its spin-off from $PEP in 1997, growing operating profit more than six times and selling to nearly 60% of restaurants outside the US. In terms of the return, $YUM stated that a $10,000 investment in the company at the time of spin-off would be worth $170,000 currently.
As part of stepping up its online presence, $PEP said it now has an exclusive team of roughly 200 e-commerce professionals working to capture growth in the e-commerce channels. The business has approx $1Bil in annual sales. "Our e-commerce retail sales are projected to be up 80% in the US and nearly double in China this year," Pepsi said.
$PEP said it allotted a major chunk of media spending and shelf space on new low-calorie, smaller brands in 3Q17, to promote its healthy offerings. The company added that it will now step up marketing spending on Pepsi and Mountain Dew, including their zero and low-calorie products for better top-line performance.
On $PEP's revenue decline in North American Beverage segment in 3Q17, CEO Indra Nooyi said the issues are temporary and the company has taken actions to improve its performance beginning in 4Q17. She added that unfavorable weather and marked slowdown in the C-store channel contributed to its sports drink, Gatorade's volume decline in 3Q17.
On $PEP's organic revenue growth of 1.7% in 3Q17, CEO Indra Nooyi said, “Each of our operating sectors delivered results in line with or ahead of our expectations, with the exception of North America Beverages, where revenues declined following two consecutive years of very strong third-quarter growth."
The sheen of $PEP's higher 3Q17 earnings was partly dampened as the company said it is slashing its FY17 guidance for organic revenue growth. It now expects organic revenue to grow 2.3% vs the previous outlook of 3%, hurt by profit declines in North American Beverage segment.
Beverage and snacks giant $PEP reported better revenue and income in 3Q17, driven by growth in Quaker Foods North America and Frito Lay North America segments. While net revenue grew 1% to $16.24Bil, net income jumped 8% to $2.14Bil. On a per share basis, net income grew 9% to $1.49, and on an adjusted basis (Core EPS), it grew 6% to $1.48.
$MSFT appointed $PEP's CFO Hugh Johnston to its Board of Directors, effective immediately. He will also be the member of Board's audit committee. He will be 13th Board member of Microsoft. Additionally, the current Board member Mason Morfit will not seek re-election to the Board and his term expires at the annual shareholders meeting in November.
Though $PEP's core performance was impacted by difficult economic conditions in 1H17, the beverage giant expects to see improvement in profit growth in 2H17, as it laps incremental investments from last year and realizes productivity from supply chain initiatives.
In 2Q17, $PEP's revenue was boosted by a 3% growth in Frito-Lay North America segment. This was supported by 6% growths each in Europe Sub-Saharan Africa and Latin America markets. Meanwhile, Asia, Middle East and North Africa saw a revenue decline of 8%.