Clearly, inflation isn’t bad for everyone. Not if you have pricing power, anyway.
Today, PepsiCo (PEP) reported earnings and sales that a beat Wall Street estimates, and raised its guidance for the next quarter.
PepsiCo reported third quarter fiscal 2023 earnings per share of $2.25, with revenue rising 6.7% to $23.5 billion.Earnings grew 14.2% from $1.97 in the the third quarter of 2022. Wall Street analysts had expected earnings of $2.17.
The company was able to post better-than-expected earnings for the quarter because PepsiCo was able to raise prices by 11% on average. While revenue increased, global volumes for its convenience foods dropped 1.5%, and North American beverage volumes slumped 6%. The company indicated that a “modest” level of new price increases for next year.
PepsiCo now anticipates full-year constant currency earnings per share growth of 13%, up from its previous estimate of 12%.
Shares closed higher by 1.88%. The stock now trades with a 2.99% dividend yield.
I own PepsiCo in my Jubak Picks Portfolio. The shares are down 5.14% since I added them to the portfolio on April 27, 2022. I also own PepsiCo in my Dividend Portfolio where the position is down 4.25% since May 11, 2022.
PepsiCo shares were down 8.6% for 2023 as of the close on October 9. They are down 10% in the last three months as invests and traders old on fears that as new generation of GLP-1 weight-loss drugs such as Ozempic that suppress appreciate would depress sales of snacks and sodas. The fears haven’t affected sales so far. “Honestly, we don’t detect it in any of our numbers right now,” PepsiCo Chief Financial Officer Hugh Johnston said in an interview Tuesday.