PepsiCo reported beating results lifted by ad efforts

PepsiCo reported beating results lifted by ad efforts


PepsiCo Inc announced its surpassing results on Wednesday as marketing and advertising efforts helped it boosting sales of sparkling water, low-sugar sodas and snacks globally, which drove sales and profits of the beverage maker to beat Wall Street estimates.

The news by the company that during the reported quarter its core sales came on growing at the fastest pace in last three years, caused price of its share risen to a record high of $125.92 in the opening session of stock market.

Under the Chief Executive Officer Ramon Laguarta, who took over the charge six months ago from Indra Nooyi, PepsiCo remained spending more on marketing and advertising, raising production capacity, while focusing more on healthier beverages and snacks by squeezing company’s supply chain; and that rewarded in better results which also came as boost for the chief executive.

In the midst of shifting preferences of a more health-conscious consumer and higher labor and transportation costs, changes made by Pepsi helped it to respond in a better way.

Part of those changes, were modification in some of its recipes with healthier ingredients, made changes in size of its products and marketing to keep the sales up.

Company’s spending on advertising and marketing increased by 11 percent, and it is evident from the business results that those advertising efforts which company remained putting into the market place have paid back, and may be most positively in Pepsi business, CFO Hugh Johnston told Reuters.

For the reported quarter, PepsiCo saw a rise of 3 percent in the total sales of Pepsi sodas, which include Pepsi Zero Sugar and Pepsi Diet.

PepsiCo out did the analysts by earning 97 cents per share against their expectations of 92 cents, while rising the revenue by 2.6 percent to $12.88 billion against the expectations of $12.70 billion.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities. I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.