Beverage and snack maker PepsiCo posted a big quarterly profit increase on Thursday despite signs that customers are buying less canned soda and bags of chips as the company continues to raise prices aggressively. reported.
The company, the maker of Gatorade, Ray’s and Quaker Oats, also raised its earnings forecast for the rest of the year, boosting its share price.
company report In the second quarter, which ended June 17, revenue increased 10% to $22.3 billion, while earnings nearly doubled to $2.7 billion from the same period last year. PepsiCo said it expects sales to grow 10% for the full year. That’s up from 8% previously expected.
Quarterly earnings beat already optimistic analyst expectations, benefiting as consumers grapple with higher prices and policy makers weigh next steps to curb inflation.
PepsiCo posted higher revenue last quarter, but the volume of products sold declined. Prices for Pepsi’s products have risen at double-digit rates over the past six quarters, and the company reports volume declines over the past three quarters.
Overall Pepsi prices rose 15% in the second quarter compared to the same period last year. Pepsi’s European division was particularly strong, with a 20% increase. Rising food prices in Europe have received particular attention from economists and policy makers, who argue corporate profits are contributing to Europe’s persistently high inflation.
“We were able to raise prices and keep consumers in our brand,” Pepsi Chief Executive Ramon Laguarta said in a call with analysts on Thursday morning. .
Laguarta cited low unemployment rates in the U.S. and around the world as the reason consumers continue to buy Pepsi products. Data released last week showed that the U.S. labor market is cooling but still strong.
Inflation data released Wednesday showed that the pace of rise in US consumer prices, including food, has slowed but is still far from the Federal Reserve’s target. Overall, food prices rose 5.7% in the year to June.
PepsiCo shares rose about 1% on Thursday. The food and beverage giant was one of the first to report earnings on a quarterly basis, playing a leading role in the performance of others. S&P 500 companies are expected to report a 7% decline in earnings in the second quarter, according to estimates compiled by FactSet.
Coca-Cola and Nestlé are due to report earnings later this month. Several major banks will report results on Friday.