PepsiCo’s Q1’21 Revenue Up 6.8%, Reiterates 2021 Guidance

Source: Kowit Lanchu, Shutterstock

Summary

  • Organic revenue during the first quarter grew 2.4 percent year over year.
  • Net income rose to US$1.71 billion from US$1.34 billion.
  • PepsiCo anticipates 2021 organic revenue to grow in mid-single digits.

Snacks and beverage maker PepsiCo, Inc. (NASDAQ: PEP) posted strong earnings for the first quarter ended March. 31 and reiterated its outlook for the full year 2021.

The New York-based company owns a number of snacks and beverage brands including Gatorade, Tropicana, Aquafina, 7 Up, Lay's, Doritos, Quaker Foods and Starbucks.

PepsiCo scrips closed at US$142.31 on Thursday’s trading. The company has a market capitalization of US$196.39 billion on NASDAQ. The stock is down 3 percent year-to-date.

In 2020, the stock price grew over 8 percent. The stock hit a 52-week low of US$126.53 in June, while it rallied to US$148.77 in December 2020.

Here, we explore the company’s performance during the first quarter and forecast for 2021.

First quarter of 2021

PepsiCo posted a 6.8 percent growth in its net revenue for the first quarter to US$14.82 billion from US$13.88 billion in first quarter 2020. Organic revenue grew 2.4 percent year-over-year during the period.

Revenue from the company’s North American beverages segment totaled US$5.07 billion, up from US$4.84 billion. Frito-Lay North America unit’s net revenue also increased to US$4.24 billion from US$4.07 billion.

The company’s GAAP EPS jumped 29 percent to US$1.24 from 96 cents in the year-ago period. Net income rose to US$1.71 billion from US$1.34 billion.

Core non-GAAP net income during the quarter came in at US$1.68 billion, or US$1.21, compared to US$1.50 billion, or US$1.07.

Source: Refinitiv, PepsiCo quarterly revenue since 2019

 

2021 Guidance

PepsiCo did not update the guidance for the full year 2021, which it provided while announcing the results for the fourth quarter of 2020.

The company continues to expect its organic revenue to grow in mid-single digits during 2021. The earnings per share is anticipated to grow at high-single digits at constant currency.

PepsiCo projects the organic revenue growth to accelerate in the second quarter. The company believes that the pace of vaccination will pick up and population mobility will improve, which should benefit foodservice channel.

In 2020, PepsiCo saw its non-GAAP EPS grow 2 percent to US$5.52 while its organic revenue increased 4.3 percent. Net revenue during the year totaled US$70.37 billion.

The company also acquired energy drink maker Rockstar, which owned Mountain Dew brand, for US$3.85 billion last year.


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