PURCHASE, N.Y. – PepsiCo’s profit and sales dipped in the first quarter, stung by a strong dollar and some weakness overseas.
But the maker of Mountain Dew, Gatorade and Naked Juice said that when excluding the unfavourable impact of currency exchange rates and an impairment change, its sales and profit rose.
In saturated markets such as the U.S., PepsiCo and other food and beverage companies are trying to lift sales in part by introducing new products or snazzier packaging that convince people to pay a little more.
As people have continued moving away from soda, for instance, PepsiCo and rival Coca-Cola have both tried to wean people off cheaper options like 2-litre bottles and toward single-serve bottles or mini cans and aluminum bottles that fetch more per ounce.
Another tactic is trying to give soda some hipster appeal, such as with PepsiCo’s recently introduced Caleb’s and 1893, which are positioned as “craft sodas.” The names are references to the Caleb Bradham’s creation of Pepsi in 1893.
Even while trying to shore up its struggling soda business in North America, PepsiCo CEO Indra Nooyi said during a call with analysts Monday that the company has been broadening its portfolio to lessen the reliance on sodas for sales.
Nooyi said the company gets just 12 per cent of its revenue from Pepsi globally, and less than 25 per cent from sodas overall.
Representatives for PepsiCo did not immediately know how those figures have changed in recent years.
Nooyi said PepsiCo is also reshaping its stable of products to better reflect the growing interest in health and nutrition.
For the period ended March 19, PepsiCo said sales declined 3 per cent to $11.86 billion, which was also shy of the $11.9 billion that analysts, according to Zacks Investment Research.
The Purchase, New York-based company earned $931 million, or 64 cents per share. A year earlier, it earned $1.22 billion, or 81 cents per share.
Stripping out an impairment charge, earnings were 89 cents per share in the latest quarter, topping the 81 cents analysts expected.
Going forward, PepsiCo anticipates 2016 adjusted earnings of $4.66 per share. Analysts polled by FactSet predict $4.70 per share.
Shares of PepsiCo edged down 63 cents to $103.14 in premarket trading shortly before the market open.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on PEP at http://www.zacks.com/ap/PEP
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