PepsiCo takes a bullish stance on 2022

Brian Sozzi · Executive Editor
2 min read

In This Article:

PepsiCo is so bullish on its product pipeline and ability to pass through price increases to combat pesky inflation, it did something out of character on Tuesday.

The beverage and snack giant — typically conservative on how it guides the Street —took a first stab at guidance for the next 15 months on its third quarter earnings release Tuesday.

"Normally we don't talk about the following year until February [earnings]. Given the sort of open questions that were out there because of all the volatility, we made a decision to provide investors with some clarity as best we can see going into next year. We do expect to see mid-single digit revenue [growth] and high-single digit core constant currency EPS [growth]. We do think that will be a terrific result on top of what has been a really, really strong 2021," PepsiCo Vice Chairman and CFO Hugh Johnston said on Yahoo Finance Live.

PepsiCo shares rose nearly 2% Tuesday morning and the stock quickly climbed up on the Yahoo Finance Trending Ticker page.

Here is how PepsiCo performed compared to Wall Street analyst estimates:

  • Net Revenue: $20.19 billion vs. $19.38 billion

  • Organic Revenue Growth: +9% vs. +6.3%

  • Diluted EPS: $1.79 vs. $1.74

The company fueled the bullish case on its stock with a solid third quarter in the the face of the unpredictable COVID-19 pandemic and intense inflationary forces.

“We really have been investing heavily in our brands and we’ve been investing heavily in innovation,” Johnston said. “I think we’re providing products that consumers are willing to pay more for.”

PepsiCo saw organic revenue growth in all of its segments, paced a 20% increase in its Africa/Middle East region. Core constant currency operating profits — a key measure for PepsiCo — rose by 47% in Latin America, 52% in Africa/Middle East and 16% in Asia.

The company lifted its full-year organic revenue growth guidance to 8% from 6%. Constant currency earnings are growing "at least" 11%, compared to a previous outlook for 11%.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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