US: Softening NA fails to slow PepsiCo Q1

PepsiCo has posted a lift in sales and profits for its first quarter, despite a softening of volumes in North America.

The company said today (24 April) that total net sales for the 12 weeks to 22 March rose by 13% in the corresponding period a year earlier to US$8.33bn, while operating profit climbed by 10% to $1.55bn. Net income rose less markedly, by 5% to $1.15bn.

Although PepsiCo's Americas Beverages (PAB) unit saw sales and operating profit increase by 6% and 7% respectively, volumes slipped by 0.6%. CSD volumes from the unit declined by 3%, and non-carbonated beverages (NCB) volume was even with a year earlier. PepsiCo's namesake cola drink saw volumes in the region slide by mid-single digits.

In Latin America, volume was driven by mid-single-digit growth in the CSD portfolio and high-single-digit growth in NCBs.

Beverage volumes at PepsiCo International were up by 15%, the company said, while volumes in the UK & Europe leapt by 25%. The strong performance in the UK & Europe was driven in part by joint acquisition of Ukrainian juice company Sandora last November, and the global expansion of the Pepsi Lipton RTD joint venture in September. Poland, Romania and Russia all grew volume at double digits, while UK beverages grew at a high-single-digit rate.

In the Middle East/Africa/Asia (MEAA) segment, beverages delivered 11% volume growth, thanks to double-digit growth in China and the Middle East. Both CSDs and NCBs grew at double-digit rates.

"Our first quarter was a solid start to the year, and we are reiterating our full-year outlook," said company chairman and CEO Indra Nooyi. "While commodities and the economic outlook remain dynamic, we believe our pricing, productivity and investment strategies will allow us to continue to deliver on our long-term goals."

Moving forward, the company said it expects 3% to 5% volume growth, high-single-digit net revenue growth and EPS of at least $3.72 for 2008.