Surging demand for sodas, PepsiCo increased its expectation for its full-year earnings forecast. In addition to the news, Pepsi also revealed its plan to raise the products’ price this year.
Packaged food companies like PepsiCo and Coca-Cola might soon rise the prices of their products soon. The global supply chain disruptions is imbalance with the rising demands. As a result, raw-material prices have gone up.
As an attempt to offset higher advertising and marketing costs, the price for Pepsi might have to raise. The prices for PepsiCo’s products will likely increase after Labor Day.
PepsiCo’s Chief Financial Officer, High Johnston, told Reuters that the company might raise the products’ price by 30% in the quarter. The company hopes to take advantage of a reopening US economy.
Pepsi benefitted from beverage sales to schools, restaurants, stadiums and other such businesses. The net revenue in North America in the second quarter reflects this.
“Performance in the food service channels was very sudden after three quarters of negative growth,” Johnston said.
“It opened up very rapidly and there was a lot of desire for people to get out as they got vaccinated,” he contnued.
Noted from Reuters, Pepsi gained 20.5% higher overall net revenue to $19.22 in the quarter ended June 12. Meanwhile, Refinitiv IBES data shows that the expectation ranged at around $17.96.
Excluding items, PepsiCo also noted a $1.72 gain per share. This figure also goes over the estimates at $1.53 per share.
Pepsi: future plans
The company is hoping to keep on recording gains for fiscal 2021. Pepsi expects a 11% gain in its core earnings per share. This figure has gone up from a prior high-single-digit figure.
Additionally, Pepsi is looking to expand an automation program to its manufacturing plants, warehouses and service centers. The expected pre-tax charges for the expansion range at around $3.15 billion.
Automation, according to Johnston, could lead to potential job losses, which would further more than offset by employment growth in other parts of the company.
Shares for Pepsico, as noted from Reuters, hit a record high in early trading by rising 2.5%.
Read also: Coca-Cola Loses US$4 Billion Because of Cristiano Ronaldo
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