PepsiCo Inc raised its full year earnings forecast on Thursday as it outperformed market expectations due to price increases and effective cost management.
The company, whose brands include Doritos, Cheetos, Lay and Gatorade, now expects earnings to rise by 8 percent, discounting the effects of special items and currency impacts. PepsiCo originally projected growth to reach 7 percent.
Reuters noted that the revenues from the company's beverage business in the Americas grew for just the second time in almost four years despite consumers preferring healthier alternatives to its carbonated softdrinks. The company booked $5.34 billion in beverage sales in the Americas in the second quarter, on higher volumes as well as price hikes in other prices to offset the stronger dollar.
The report added that PepsiCo's Frito-Lay snack sales in North America, the company' second largest business, inched up by 2 percent to $3.45 billion in the quarter.
In a statement, PepsiCo CEO Indra Nooyi said the investments on brand building and research and development were also instrumental in the company's performance.
"Through scientific R&D and strategic insights, we are developing sustainable innovation to offer consumers the range of food and beverage choices they're looking for and creating a powerful platform for growth. As a result, we continue to drive growth for our retail partners. Notably, in the second quarter, PepsiCo was once again the largest contributor to retail sales growth in the U.S., our largest market, among all food and beverage manufacturers, with over $400 million of retail sales growth in all measured channels, Nooyi said.
She added that the company continues to face challenges worldwide particularly on volatile exchange rates.
"The macroeconomic environment around the world remains volatile and foreign exchange headwinds persist in many of our international markets. The steps we are taking to manage our businesses responsibly - such as taking pricing actions and optimizing our global sourcing - are clearly contributing to high-quality top and bottom-line year-to-date results and position us well for the remainder of 2015," Nooyi said.
