PepsiCo (NASDAQ: PEP) reported better-than-expected earnings on Tuesday and consequently raised its revenue outlook for the year. The positive results came amid inflation and rising prices for its Doritos chips and Gatorade drinks. The company’s shares rose under 1% in premarket trading amid the news.
The multinational food, snack, and beverage company reported earnings of USD1.86 per share, versus the expected USD1.74 a share. Revenue amounted to USD20.23 Billion, higher than analysts anticipated USD19.51 Billion.
“We are facing inflation like everyone else, and we think that is going to persist for a while, but we are taking enough pricing to be able to manage the inflation, and our focus is really much more on how do we drive costs out of the business,” said Hugh Johnston, PepsiCo’s chief financial officer.
According to Johnston, consumers have not been deterred by the implemented price hikes.
“In a world where we’re seeing things like vegetable oil, grains, and packaging prices increasing dramatically, I would be surprised if there wasn’t more (price increase) over the course of the next year,” Johnston said.
The company now expects revenue growth of 10%, an increase from its previous 8% forecast. This is the second consecutive quarter that the company raises its revenue forecast without also updating its earnings guidance. Pepsi still foresees currency earnings per share growth of 8%.