PepsiCo Reports Second-Quarter 2022 Results; Updates Full-
Year Outlook
Reported (GAAP) Second-Quarter and Year-to-Date 2022 Results
Second-Quarter | Year-to-Date | |
Net revenue growth | 5.2% | 7.0% |
Foreign exchange impact on net revenue | (3)% | (2)% |
Earnings per share (EPS) | $1.03 | $4.09 |
EPS change | (39)% | 39% |
Foreign exchange impact on EPS | (2)% | (2)% |
Organic/Core (non-GAAP)1 Second-Quarter and Year-to-Date 2022 Results | ||
Second-Quarter | Year-to-Date | |
Organic revenue growth | 13.0% | 13.3% |
Core EPS | $1.86 | $3.15 |
Core constant currency EPS change | 10% | 9% |
PURCHASE, N.Y. - July 12, 2022 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the second quarter 2022.
"We are pleased with our results for the second quarter as our business momentum continued despite ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets," said Chairman and CEO Ramon Laguarta.
Laguarta continued, "Our results are indicative of our highly dedicated employees, the strength and resilience of our categories, agile supply chain and go-to-market systems and strong marketplace execution. Our performance also gives us confidence that our investments to become an even Faster, even Stronger, and even Better organization by winning with pep+ are working. Given our year-to-date performance, we now expect our full-year organic revenue to increase 10 percent (previously 8 percent) and we continue to expect core constant currency earnings per share to increase 8 percent."
1Please refer to the Glossary for the definitions of non-GAAP financial measures, including "Organic Revenue Growth," "Core" and "Constant Currency," and to "Guidance and Outlook" for additional information regarding PepsiCo's full-year 2022 financial guidance. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market net impacts. Please refer to PepsiCo's Quarterly Report on Form 10-Q for the 12 and 24 weeks ended June 11, 2022 (Q2 2022 Form 10-Q) filed with the SEC for additional information regarding PepsiCo's financial results.
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Summary Second-Quarter 2022 Performance | |||||||
Revenue | Volume(a) | ||||||
Percentage Point Impact | % Change | ||||||
Acquisitions, | |||||||
GAAP | Foreign | Divestitures, | |||||
and Other | Organic | Convenient | |||||
Reported | Exchange | Structural | Beverages | ||||
% Change | Translation | Changes | % Change | Foods | |||
Frito-Lay North America | 14 | - | - | 14 | (2) | ||
Quaker Foods North America | 17 | - | - | 18 | 2 | ||
PepsiCo Beverages North | (1) | - | 9 | 9 | (1) | ||
America | |||||||
Latin America | 23 | (2) | 1 | 22 | 6 | 9 | |
Europe | (8) | 12 | 5 | 9 | (7) | (8) | |
Africa, Middle East and South | 6 | 7 | 10 | 23 | 10 | 28 | |
Asia | |||||||
Asia Pacific, Australia and New | 3 | 2 | 7 | 13 | 12 | 6 | |
Zealand and China Region | |||||||
Total | 5 | 3 | 5 | 13 | 3 | 6 |
Operating Profit and EPS
Percentage Point Impact | ||||
GAAP Reported | Items Affecting | Foreign | Core Constant | |
Exchange | Currency | |||
% Change | Comparability | Translation | % Change | |
Frito-Lay North America | 5 | - | - | 5 |
Quaker Foods North America | 5 | - | - | 6 |
PepsiCo Beverages North America | (20) | 16 | - | (3) |
Latin America | 18 | 23 | (2) | 39 |
Europe | (297) | 288 | 11 | 2 |
Africa, Middle East and South Asia | 14 | (3) | 7 | 18 |
Asia Pacific, Australia and New Zealand and | 7 | (1) | 4 | 10 |
China Region | ||||
Corporate unallocated expenses | (31) | 20 | - | (10) |
Total | (34) | 41 | 2 | 10 |
EPS | (39) | 47 | 2 | 10 |
- Excludes the impact of acquisitions, divestitures and other structural changes. In certain instances, the impact of organic volume growth on net revenue growth differs from the unit volume change due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between bottler case sales (BCS) and concentrate shipments and equivalents (CSE). We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
Note: Amounts may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic Revenue Growth," "Core" and "Constant Currency."
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Summary Year-to-Date 2022 Performance
Revenue
Percentage Point Impact | ||||
Acquisitions, | ||||
GAAP | Foreign | Divestitures, | ||
and Other | Organic | |||
Reported | Exchange | Structural | ||
% Change | Translation | Changes | % Change | |
Frito-Lay North America | 14 | - | - | 14 |
Quaker Foods North America | 14 | - | - | 14 |
PepsiCo Beverages North | 2 | - | 8 | 10 |
America | ||||
Latin America | 21 | - | 1 | 22 |
Europe | (5) | 11 | 4 | 9 |
Africa, Middle East and South | 9 | 6 | 7 | 21 |
Asia | ||||
Asia Pacific, Australia and New | 5.5 | 2 | 4 | 11 |
Zealand and China Region | ||||
Total | 7 | 2 | 4 | 13 |
Volume(a)
% Change
Convenient
Foods Beverages
(1)
-
1
- 8
- (5)
1021
5.510
36
Operating Profit and EPS
Percentage Point Impact | ||||
GAAP Reported | Items Affecting | Foreign | Core Constant | |
Exchange | Currency | |||
% Change | Comparability | Translation | % Change | |
Frito-Lay North America | 5 | (0.5) | - | 4 |
Quaker Foods North America | 6 | - | - | 6 |
PepsiCo Beverages North America | 248 | (243) | - | 4.5 |
Latin America | 29 | 15 | - | 44 |
Europe | (274) | 254 | 9 | (11) |
Africa, Middle East and South Asia | 19 | (2) | 5 | 23 |
Asia Pacific, Australia and New Zealand and | 5 | - | 2 | 8 |
China Region | ||||
Corporate unallocated expenses | (11) | 18 | - | 7 |
Total | 35 | (28) | 2 | 8 |
EPS | 39 | (32) | 2 | 9 |
- Excludes the impact of acquisitions, divestitures and other structural changes. In certain instances, the impact of organic volume growth on net revenue growth differs from the unit volume change due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
Note: Amounts may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic," "Core" and "Constant Currency."
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Guidance and Outlook
The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.
The Company now expects to deliver 10 percent organic revenue growth (versus our previous guidance of 8 percent) for fiscal year 2022.
Consistent with its previous guidance for 2022, the Company continues to expect:
- An 8 percent increase in core constant currency EPS;
- A core annual effective tax rate of 20 percent; and
- Total cash returns to shareholders of approximately $7.7 billion, comprised of dividends of $6.2 billion and share repurchases of $1.5 billion.
In addition, the Company continues to expect a 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates.
This assumption and the guidance above imply 2022 core EPS of $6.63, a 6 percent increase compared to 2021 core EPS of $6.26.
Prepared Management Remarks and Live Question and Answer Webcast
At approximately 6:30 a.m. (Eastern time) on July 12, 2022, the Company will post prepared management remarks (in pdf format) of its second quarter 2022 results and business update, including its outlook for 2022, at www.pepsico.com/investors. At 8:15 a.m. (Eastern time) on July 12, 2022, the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company's website at www.pepsico.com/investors.
Contacts: Investor Relations | Communications |
investor@pepsico.com | pepsicomediarelations@pepsico.com |
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PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Statement of Income (in millions except per share amounts, unaudited)
12 Weeks Ended | 24 Weeks Ended | ||||||||||
6/11/2022 | 6/12/2021 | 6/11/2022 | 6/12/2021 | ||||||||
Net Revenue | $ | 20,225 | $ | 19,217 | $ | 36,425 | $ | 34,037 | |||
Cost of sales | 9,415 | 8,880 | 16,848 | 15,551 | |||||||
Gross profit | 10,810 | 10,337 | 19,577 | 18,486 | |||||||
Selling, general and administrative expenses (a) | 7,387 | 7,208 | 13,967 | 13,045 | |||||||
Gain associated with the Juice Transaction (b) | (13) | - | (3,335) | - | |||||||
Impairment of intangible assets (c) | 1,359 | - | 1,601 | - | |||||||
Operating Profit | 2,077 | 3,129 | 7,344 | 5,441 | |||||||
Other pension and retiree medical benefits (expense)/income | (2) | 126 | 132 | 246 | |||||||
Net interest expense and other | (236) | (241) | (476) | (499) | |||||||
Income before income taxes | 1,839 | 3,014 | 7,000 | 5,188 | |||||||
Provision for income taxes | 393 | 642 | 1,281 | 1,093 | |||||||
Net income | 1,446 | 2,372 | 5,719 | 4,095 | |||||||
Less: Net income attributable to noncontrolling interests | 17 | 14 | 29 | 23 | |||||||
Net Income Attributable to PepsiCo | $ | 1,429 | $ | 2,358 | $ | 5,690 | $ | 4,072 | |||
Diluted | |||||||||||
Net income attributable to PepsiCo per common share | $ | 1.03 | $ | 1.70 | $ | 4.09 | $ | 2.94 | |||
Weighted-average common shares outstanding | 1,389 | 1,388 | 1,390 | 1,387 |
- The increase in selling, general and administrative expenses for the 12 and 24 weeks ended June 11, 2022, as compared to the 12 and 24 weeks ended June 12, 2021, primarily reflects higher selling and distribution costs.
- In the 24 weeks ended June 11, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash and a 39% noncontrolling interest in a newly formed joint venture operating across North America and Europe (Juice Transaction).
- In the 12 and 24 weeks ended June 11, 2022, we recorded pre-tax impairment charges of $1.4 billion and $1.6 billion, respectively, primarily related to the decrease in fair value of our indefinite-lived intangibles as a result of the Russia-Ukraine conflict.
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PepsiCo Inc. published this content on 12 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 July 2022 10:03:03 UTC.