PepsiCo Inc. reported stronger-than-expected fourth-quarter revenue as consumers kept their pantries full with the company’s snack and cereal offerings through the extended global lockdown.

Sales rose 8.8 per cent to US$22.46 billion in the quarter, PepsiCo said, topping the US$21.81 billion average estimate from analysts. The maker of Lay’s potato chips and Tropicana juice announced a 5 per cent increase in its annualized dividend.

Key Insights

• PepsiCo said organic sales rose 5 per cent at its Frito-Lay division, and the company saw an 8 per cent increase at Quaker Foods North America. For 2021, the company forecast a mid-single digit increase in organic revenue and a high-single digit gain in earnings per share excluding currency fluctuations.
• “We ended the year on a strong note with our global beverage business having accelerated while our global snacks and food business remained resilient in the fourth quarter,” Chief Executive Officer Ramon Laguarta said in a statement.
• Costs related to the coronavirus pandemic reduced operating profit growth by 2 percentage points at Frito-Lay and Quaker Foods.
• The company’s North America beverage business, which had struggled amid closed restaurants, stadiums and other public venues, reported 5.5 per cent organic revenue growth in the quarter.
• PepsiCo said earlier this week that it would rename the racially offensive Aunt Jemima brand of pancake mix and syrup.

Market Reaction

• PepsiCo shares were little changed in premarket trading. The stock fell 7.1 per cent this year through Wednesday, trailing the 4.1 per cent rise of the S&P 500 Index.