PepsiCo's Quarterly Profit Beats As Advertising Push Pays Off

By Donna Ahern
PepsiCo's Quarterly Profit Beats As Advertising Push Pays Off

PepsiCo Inc beat quarterly revenue and profit estimates on Thursday, as ramped up advertising and new low calorie versions of Gatorade boosted demand for its beverages in North America.

Shares rose 3% to $138 in light premarket trading, as the company said it expects to meet or exceed its fiscal 2019 organic revenue growth target of 4%.

Revive And Promote

Since taking the helm last October, chief executive officer Ramon Laguarta has charted out an aggressive spending plan to revive demand for out-of-favour sugary sodas and promote new flavours launched to cater to health conscious consumers.

PepsiCo's advertising and marketing expenditure has jumped 12% so far this year as the company has splurged on new ads for its trademark Pepsi beverages, rounding off with a campaign centering around the National Football League's 100th anniversary.


Overall beverage sales in North America rose 3.4% in the third quarter to $5.64 billion, also helped by new low sugar and organic versions of the Gatorade sports drink.

Net revenue rose 4.3% to $17.19 billion in the three months ended 7 September, beating analysts' estimates of $16.93 billion, according to IBES data from Refinitiv.

However, net income attributable to the company fell to $2.10 billion, or $1.49 per share, from $2.50 billion, or $1.75 per share, a year earlier.

Excluding one-time items, the company earned $1.56 per share, beating the average estimate of $1.50.

News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.

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