PepsiCo is again raising the prices of its drinks and snacks as it continues to face high levels of inflation.
The company raised prices for its products at the start of the current quarter, Chief Financial Officer Hugh Johnston told the Financial Times on Wednesday, and was willing to increase them further as long as consumer demand remained as resilient as it has. been so far.
PepsiCo said Wednesday that prices for its product portfolio, which includes Gatorade sports drinks and Doritos chips, rose 17% overall from a year earlier in its third quarter. Johnston said the company faces a level of inflation “a few points” higher than the price increases, leaving the company to absorb the difference if offsetting cost reductions cannot be made elsewhere in the business.
Global sales volumes fell only slightly, indicating consumer tolerance for the more expensive products.
Driven by price increases, the company now expects organic revenue, which removes the impact of recent acquisitions or divestitures, to grow 12% in 2022, versus a previous forecast of a 10% increase. The company had already raised its revenue forecast in April and July.
PepsiCo now expects earnings of $6.73 per share this year, 10 cents higher than its previous forecast.
Despite updates to its revenue and earnings outlook, PepsiCo warned that a stronger dollar would now lead to a negative exchange rate impact on earnings of 2.5 percentage points, down from 2 percentage points previously.
For the 12 weeks to Sept. 3, PepsiCo posted revenue of nearly $22 billion, beating analysts’ expectations of $20.8 billion and up from $20.2 billion in the same period last year. . Earnings of $1.95 per share beat Wall Street’s forecast of $1.84.
Shares of the New York-based group rose 4.4% as of midday Wednesday.
Additional reporting by Mark Wembridge in London