Pepsi sweetens profits despite Kendall Jenner flub Nathan Bomey and Zlati Meyer
Putting its Kendall Jenner debacle behind it, the parent of Pepsi delivered an upbeat earnings report Tuesday and downplayed worries about whether Americans are turning away from sugary drinks.
PepsiCo reported an uptick in second-quarter revenue and profit as its critical North American beverages division gained ground amid lower-than-expected promotional spending and productivity gains.
The beverage and snacks giant’s revenue increased 2% to $15.7 billion in the quarter ended June 17. That edged S&P Global Market Intelligence analyst expectations of $15.57 billion. Net income of $2.1 billion, up 5% from the same quarter a year ago, topped expectations of $2 billion.
The company’s stock dropped 0.5% Tuesday to $113.74 per share.
PepsiCo CEO Indra Nooyi said the company met its expectations for the quarter but must continue to innovate.
“We have a can-do spirit with a must-do result,” Nooyi said in a conference call. “The business is very different than it was five years ago, and we expect it to be very different five years from now.”
PepsiCo continues to develop the non-soda part of its portfolio, including the recent introduction of new products such as premium bottled water, LIFEWTR, and the new Quaker Overnight Oats.
In addition, the company said it’s reducing sugar, sodium and saturated fat in some drinks and snack foods.
The strong earnings report came after PepsiCo took a public relations hit during the quarter over a Pepsi TV ad featuring reality star Kendall Jenner. Pepsi announced in April that it would pull its new TV ad depicting Jenner leaving a modeling shoot to join a protest march. The ad was criticized for being insensitive.
During the second quarter, revenue rose 1.9% to $5.2 billion in the North American beverages division, the company’s largest unit.