In the midst when many of its peers have been struggling for, PepsiCo has reported growth in its quarterly results on Friday, and told investors that it will come at a cost.
PepsiCo in 2018 came on investing in advertisement and marketing, which helped boost its sales by 3.7 percent in the year, and in North America, where its beverage business remained declining until recent past, has also grew by 2 percent, whereas its peers like Mondelez, Nestle and Kellogg came out posting this year less or even decline in their sales growth.
But the owner of brands like Frito-Lay and Mountain Dew said that those efforts to boost its top line products will be hurting profits and forecasted that in 2019 it’s per share earnings will be $5.50 which is less than $5.66 it had earned in 2108, while Wall Street was expecting it to be $5.86 in 2019. But calm the investors’ concerns saying that earnings are expected to be returning towards growth by 2020.
In fiscal fourth-quarter, company reported net income of $6.85 billion or $4.83 per share which remained higher than last year’s loss of $710 million or 50 cents per share. Excluding merger and integration charges, net tax benefits and other items, PepsiCo succeeded to meet the Wall Street’s expectation for earnings of $1.49 per share.
For net sales in the fiscal fourth-quarter, PepsiCo remained level with analysts’ expectations as well as last year’s sales and reported net sales of $19.52 billion.
Besides investing in marketing and advertising, PepsiCo is also intending to level off the impact of those investments with a cost-saving program. The intended cost-saving program, an extension of a previous saving plan expected to be end after this year, will likely to be make savings of $1 billion every year through 2023.
From June onward, PepsiCo is also increasing divided of $3.71 by 3 percent to $3.82, company also announced on Friday.