Despite lower demand, PepsiCo (NASDAQ:PEP) reported a 7% increase in revenue for the third quarter, as the company maintained its pattern of substantial price hikes.
During the July-September period, Pepsi raised prices by 11%, marking the seventh consecutive quarter of double-digit price increases. Sales volumes saw a decline of 2.5%.
PepsiCo has justified these price hikes by citing elevated ingredient costs, particularly for items like cooking oil.
The company has been introducing new products such as Doritos Spicy Pineapple Jalapeno chips and implementing effective advertising strategies, which have contributed to the success of brands like Gatorade.
However, sales volumes for Frito-Lay North America dipped by 0.5% during the same period, even as net prices rose by 8%. Meanwhile, North American beverage sales volumes dropped by 6% alongside a 12% increase in prices.
In Europe, sales volumes remained stable, while Latin America experienced a 5% decline.
Net pricing encompasses both price increases and changes in the product mix, as well as the introduction of smaller package sizes. PepsiCo noted that consumers are increasingly opting for smaller packages for the sake of convenience and portion control.
PepsiCo reported a net revenue of $23.4 billion, in line with Wall Street’s expectations according to analysts surveyed by FactSet.
Pepsi’s net income surged by 14% to $3.1 billion, translating to $2.24 per share, surpassing analysts’ forecast of $2.15 per share.
Due to robust sales and cost-saving efforts, Pepsi now anticipates a 13% increase in full-year earnings per share, up from the previous projection of 12%.
Featured Image: Freepik @ yarunivstudio
Author Stephanie Bédard-Châteauneuf 
