By Dave Sebastian
PepsiCo Inc. posted lower revenue for the latest quarter as it made less in its main beverage segment, though its snacks sales rose as Covid-19 shelter-in-place measures and closures eased during the period.
The beverage giant on Monday said second-quarter sales fell 3.1% from the prior year to $15.95 billion. Analysts polled by FactSet were expecting $15.37 billion.
Pepsi's organic revenue, which strips out the effect of currency swings and acquisitions, was off 0.3% for the period.
"As restrictions and closures eased and population mobility improved as the quarter progressed, we [saw] an improvement in our business performance and channel mix dynamics," Chairman and Chief Executive Ramon Laguarta said. "However, the environment has remained volatile and much uncertainty remains about the duration and long-term implications of the pandemic."
Revenue at its North American beverage division, the company's biggest contributor, fell 6.6% to $4.97 billion.
In its Frito-Lay North America division, which makes Doritos, Lays potato chips and other snacks, sales rose 6.6% to $4.27 billion. Sales at Quaker Foods North America rose 23% to $664 million.
PepsiCo's packaged-food unit that sells Aunt Jemima products last month said it would retire the brand because of its origins in racist imagery of Black people amid a national reckoning over racial justice following the killing of George Floyd.
Latin America sales fell 17%, Europe sales fell 9.2% and sales in the Asia-Pacific, Australia, New Zealand and China region rose 9.9%. In Africa, the Middle East and South Asia, sales were off 1.4%.
Net income fell to $1.65 billion, or $1.18 a share, from $2.04 billion, or $1.44 a share, in the comparable quarter last year.
Adjusted earnings were $1.32 a share, ahead of the $1.25 a share analysts were looking for.
The company said it expects a fiscal 2020 revenue and core earnings per share to be hurt by a 3 percentage-point foreign-exchange translation effect.