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PepsiCo Stock Slips After Q3 Earnings Beat, Sales Forecast Boost

PepsiCo beat Wall Street's Q3 earnings forecasts with a bottom line of $1.79 per share, and boosted its full year sales outlook as post-pandemic soda demand continues to rebound.

PepsiCo  (PEP) - Get PepsiCo, Inc. Report posted stronger-than-expected third quarter earnings Tuesday, and boosted its full-year revenue forecast, thanks in part to a rebound in soda demand in key markets. 

PepsiCo said core earnings for the three months ended on September 4 were pegged at $1.79 per share, up 7.8% from the same period last year and 6 cents ahead of the Street consensus forecast.  

Group revenues, PepsiCo said, rose 11.6% to $20.19 billion, again topping analysts forecasts of a $19.39 billion tally. Beverages revenues in north America were up 7% from last year, PepsiCo said, and 27% in Latin America. Frito Lay sales were up 6%, the company said.

Looking into the final months of the year, PepsiCo said it sees full-year core earnings of at least $6.20 per share -- a figure largely in-line with prior estimates -- as well as an 8% growth rate for organic revenues.

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“We are pleased with our results for the third quarter as we delivered very strong net revenue growth while carefully navigating a dynamic and volatile supply chain and cost environment," said CEO Ramon Laguarta. "Given our year-to-date performance, we now expect our full-year organic revenue to increase approximately 8% and core constant currency earnings per share to increase at least 11%,”

“Our strong year-to-date results demonstrate that the investments we have made towards becoming a Faster, Stronger, and Better company are working. To further complement and enhance our strategic framework, we recently introduced PepsiCo Positive (pep+), a fundamental end-to-end transformation of what we do and how we do it to create growth and shared value with sustainability and human capital at the center," he added. "We are extremely pleased with the progress we are making on our strategic agenda, and remain committed to the investments in our people, supply chain, plants, go-to-market systems, and digitization initiatives to build competitive advantages and win in the marketplace.”  

PepsiCo shares were marked 1.1% higher in early Tuesday trading immediately following the earnings release to change hands at $151.80 each, a move that would extend the stock's year-to-date gain to around 7%.