By Juveria Tabassum
(Reuters) -PepsiCo reported better-than-expected quarterly results on Thursday, driven by steady demand for its sodas and snacks in the U.S. and other major markets, including Europe.
PepsiCo, like its rival Coca-Cola, has responded to a shift in consumer demand for healthier drinks and snacks by offering more options, such as its recently acquired prebiotic soda brand Poppi.
“Our business remained resilient during the second quarter, navigating through a complex geopolitical and macroeconomic environment,” PepsiCo executives said in a statement.
The latest statement indicates the company was coping with the pressures after its executives had previously sounded the alarm on the impact of political and economic uncertainty on its businesses in the U.S. and some international markets.
Its North America foods business, which houses brands such as Lay’s and Cheetos, also saw an improvement in volumes as it offered products at lower price points, while adding new flavors to its popular snacking brands to cater to a diverse palate.
“Expectations were low coming in and while results were not overly robust, they exceeded expectations,” RBC Capital Markets analyst Nik Modi said.
PepsiCo also backed its strategy to cushion a blow to its supply chain from U.S. President Donald Trump’s sweeping tariff policy, including adjusting the sourcing of some raw materials.
The Gatorade maker’s shares were up 2% in premarket trading as a weaker dollar helped the Lay’s parent forecast a smaller annual profit drop. PepsiCo’s international business accounts for about 40% of its total net revenue.
The company now expects full-year core earnings per share to fall 1.5%, compared with a 3% decline expected previously.
The Quaker Oats parent maintained its forecast for flat annual core earnings on a constant currency basis, which it cut last quarter to account for the hit to its supply chain costs from tariffs.
Organic revenue at PepsiCo’s North America beverage unit rose 1% in the second quarter, following a 2% fall in the prior three-month period.
PepsiCo’s second-quarter revenue rose about 1% to $22.73 billion, compared with analysts’ average estimate of a 0.99% decline to $22.28 billion, according to data compiled by LSEG.
Excluding certain impairment charges, PepsiCo earned $2.12 per share, beating estimates of $2.03 per share.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Anil D’Silva)
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