Salty snacks give PepsiCo boost
PepsiCo, grappling with a slumping soda business, got another boost from its food operations. The maker of Mountain Dew drink posted second quarter profit that topped analysts’ estimates, helped by strong sales of Frito-Lay chips and Quaker oatmeal, according to a statement on Tuesday.
Core earnings per share were $1.61, 9 cents above analysts’ consensus estimate. Results sent company shares up 1.6% in early trade. Stock closed Monday at $107.76 in New York, down 10% for the year. PepsiCo, like rival Coca-Cola, is looking beyond sugary soda to drive growth as consumers become more health-conscious. Chief executive officer Indra Nooyi has said fixing the struggling North American beverage unit is a top priority, but in the meantime the company is getting a boost from its food brands.
Consumer giants ranging from PepsiCo to Nestle are wrestling with changing tastes as shoppers turn away from sugary foods and drinks and seek out healthier fare. Consumption of carbonated soft drinks fell to a 32-year low in the US last year, according to Beverage-Digest, a trade publication.
While chips have been less affected than sodas, PepsiCo has also introduced organic versions of some big snack brands, in addition to buying startup competitors.