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Pepsico Gains on Raising Annual Guidance as Q3 Numbers Top Estimates By Investing.com

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© Reuters.

By Dhirendra Tripathi

Investing.com – PepsiCo stock (NASDAQ:) traded 1.2% higher in Tuesday’s premarket as the company raised its guidance for the year after beating estimates for the third quarter.

As more people return to theaters and restaurants, they have boosted demand for snacks and drinks. This prompted optimism about the company.

According to the company, full-year organic revenues will increase by approximately 8% in comparison to the 6% it had previously forecast.

Initial reactions to signs of slowing sales growth by volume led to negative reaction in the shares. However, they quickly rebounded and traded higher.  

The 12 week ended September 4. Pepsico Organic revenue growth was 9%, which included 4 percentage points growth in volume and a contribution of 5 percentage points from price/mix.

This compares with volume growth at 7 percent during the second quarter. Revenue rose 12.8%.

Pepsico North America has the largest market and this presented many challenges.

PepsiCo Beverages North America achieved 7% organic growth, and Frito-Lay North America reported a 5.5% increase. In the second quarter, the two regions’ businesses grew by 21% and respectively 6% faster than the other. The international organic revenue increased 14%.

Company claims it increased its North American market share in carbonated soft drinks, mainly due to trademark Mountain Dew. It gained market share in both the water and ready-to drink tea categories.

Pepsico’s third-quarter net revenue rose nearly 12% to $20.18 billion but profits fell as cost of sales rose more than 15% and selling expenses also went up by 10%. Although profit fell by 3% to $2.22billion, on a per-share basis it was more than expected.

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