BENGALURU, India (Reuters) – PepsiCo raised its 12-month revenue forecast on Tuesday and said it may raise prices further in the coming months, with the company seeing little impact on demand for its soft drinks and snacks despite the highest inflation in decades.
By 11 am, the company’s shares were up 0.4% to $171.1 each (Brasília time).
PepsiCo’s chief financial officer Hugh Johnston told Reuters the company had not seen any slowdown in demand in response to price increases, largely implemented late last year, and that there was room for further highs.
“In a world where we’re seeing things like vegetable oil, grains and packaging prices increasing dramatically, I would be surprised if there aren’t more (price increases) over the next year,” Johnston said.
The company’s net revenue for the second fiscal quarter (ending June 11) rose 5.2% to $20.23 billion, beating estimates of $19.51 billion, according to data compiled by Refinitiv’s IBES. The company also beat profit projections.
Johnston added that PepsiCo was having “constructive conversations” with most retailers about passing price increases on to consumers.
PepsiCo expects fiscal 2022 organic revenue, which eliminates the impact of currency fluctuations, to increase 10% compared to its previous projection of an 8% increase.
The company is also looking to cut costs with cheaper packaging and a more cautious procurement approach, Johnston said.
PepsiCo recorded a $1.4 billion charge in its second quarter, mainly related to the write-off of some assets due to the conflict between Russia and Ukraine.
(By Uday Sampath)
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