US: PepsiCo links snacks and drinks to trump Coca-Cola Co - analyst
PepsiCo has beaten recent slides in US convenience stores
In an call with investors following the release of its first-half results yesterday (25 July), the company said convenience-store trends outperformed overall results. Rivals Coca-Cola, following its own H1 results last week, said convenience-store performance has weakened since mid-May.
This difference shows PepsiCo has successfully leveraged its share strength in convenience stores and, in a surprise move, co-merchandised and co-promoted its beverage lines with snacks, analysts Stifel Nicolaus said in a note yesterday.
Mountain Dew is PepsiCo's strongest driver in convenience-store share strength, the analysts said.
Stifel Nicolaus also highlighted PepsiCo's comments that its PET contracts allow it to hedge resin supplies, even though there is no market-based instrument for hedging the commodity. It implies PepsiCo has not benefited from recent declines in PET prices, the note said.
PepsiCo's shares ended trading yesterday up 2.2% at US$70.50.
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