PepsiCo Boosts Annual Guidance Following Solid Q3 Beat

PepsiCo Inc PEP reported third-quarter FY22 sales growth of 8.8% year-on-year to $21.97 billion, beating the consensus of $20.81 billion.
Net revenue from Frito-Lay North America increased 20% Y/Y, Quaker Foods North America rose 15%, and PepsiCo Beverages North America climbed 4%. Latin America sales rose 20% Y/Y.
The gross profit increased 8% Y/Y to $11.7 billion, and the profit margin fell 40 basis points Y/Y to 53.1%.
The operating margin contracted 30 basis points to 15.3%, and operating income for the quarter climbed 6.1% to $3.4 billion.
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The company held $6.5 billion in cash and equivalents as of October 3, 2022. Net cash provided by operating activities year-to-date totaled $6.3 billion.
Core EPS of $1.97 beat the analyst consensus of $1.84.
Outlook: PepsiCo expects FY22 organic revenue growth of 12% (previously 10%).
It sees FY22 core constant currency EPS growth of 10% (previously 8%). Pepsico expects FY22 core EPS of approximately $6.73 (previously $6.63), versus an estimate of $6.69.
Pepsico expects total cash returns to shareholders of $7.7 billion, comprised of dividends of $6.2 billion and share repurchases of $1.5 billion.
Price Action: PEP shares are trading higher by 1.39% at $164.85 in premarket on the last check Wednesday.
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