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    Friday, October 4, 2019

    PepsiCo Record Sales Growth in Q3 Amid Rising Costs Impact on Earnings

    PepsiCo on Thursday announced quarterly earnings and revenue that topped expectations, as its increased spending on advertising and marketing paid off for brands like Gatorade.
    PepsiCo, Inc reported a 16% decline in profit for the third quarter of 2019 to $2.1bn, driven by increased spending on advertising as well as administrative expenses, which climbed by 8.59%.

    The New York-based firm said that the increased ad spending did help boost sales by 4.26% to $17.1bn from $16.5bn.

    Commenting on the results, PepsiCo’s Chief Financial Officer, Hugh Johnston said: “We’re seeing returns on the investment.”

    However, the growth was not enough to lift earnings higher. The company noted that income tax provisions, which jumped 197% in the period, also weighed on the firm’s earnings.

    Speaking on the results, PepsiCo CEO, Ramon Laguarta, said: “We are making good progress against our strategic priorities and our businesses are performing well as we continue to make the necessary investments in our capabilities, brands, manufacturing and go-to-market capacity to propel our future growth.”

    PepsiCo had its Frito-Lay North America snack business to thank for the sales growth as it logged 5% growth from last year. Its North America Beverage business also fared well with a 3% lift, just as its Quaker Foods North America business grew by 2%.

    The company’s performance in foreign markets was also impressive with Latin America, Europe Sub-Saharan Africa and Asia, Middle East and North Africa all recording positive growths of 2%, 6% and 5% respectively.

    Looking forward to the rest of the year, the company said that given its performance year-to-date, it now expects to meet or exceed its full-year organic revenue growth target of 4%.

    Read the full PepsiCo earnings release here.

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