Beverage and snack maker PepsiCo reported a big jump in quarterly profit on Thursday, despite signs that customers are buying fewer cans of soda and bags of chips as the company aggressively raises prices.
The maker of Gatorade, Lay’s and Quaker Oats also raised its forecast for earnings over the rest of the year, sending its stock higher.
company informed of Revenue rose 10 percent to $22.3 billion in the second quarter that ended June 17, and its profit nearly doubled from the same period last year to $2.7 billion. PepsiCo said it expected revenue to rise 10 percent for the full year. up from his previous forecast of 8 percent.
The quarterly results exceeded analysts’ already optimistic expectations, and the gains came as consumers grapple with higher prices while policymakers consider their next steps in their efforts to control inflation.
Although PepsiCo earned more in the previous quarter, the amount of products it sold decreased. Prices for Pepsi products have increased by double digits in each of the past six quarters, and the company has posted declining sales volumes in each of the past three quarters.
Pepsi’s total prices were up 15 percent in the second quarter compared to the same quarter last year. This growth was particularly seen in Pepsi’s European division, up to 20 percent. Rising food prices in Europe have attracted particular scrutiny from economists and policymakers, who have said that corporate profits were contributing to the extremely high inflation there.
“We’ve been able to raise prices and consumers remain within our brands,” Pepsi Chief Executive Ramon Laguarta said on a call with analysts Thursday morning.
Mr. Laguarta cited low unemployment in the United States and around the world as one of the reasons consumers continue to buy Pepsi products. Data released last week showed the US labor market is cooling but still strong.
Inflation data released on Wednesday showed that consumer prices, including food, rose at a slower pace in the United States, although still far from the Federal Reserve’s target. Overall, food prices rose 5.7 percent in the year to June.
PepsiCo shares rose nearly 1 percent on Thursday. The food and beverage giant is one of the first companies to report earnings each quarter, which serves as a signal about how other companies are performing. Companies in the S&P 500 are expected to report a 7 percent decline in profit in the second quarter, according to estimates compiled by FactSet.
Coca-Cola and Nestle will report earnings later this month. Many major banks will present their results on Friday.
