PepsiCo (PEP) has reported first-quarter financial results that beat Wall Street’s expectations across the board as price cuts lured back consumers.
The Harrison, New York-based company announced earnings per share (EPS) of $1.61 U.S., which topped the $1.55 U.S. consensus forecast of analysts.
Revenue in the period totaled $19.44 billion U.S., which beat the $18.94 billion U.S. expected on Wall Street. Sales were up 8.5% from a year earlier.
Management said the latest quarter marked a return to volume growth and was helped by price cuts for popular potato chips such as Lay’s and Doritos.
In February of this year, PepsiCo cut prices on Lay’s, Tostitos, Doritos, and Cheetos by as much as 15% to try to win back shoppers.
Additionally, PepsiCo’s earnings got a boost from the acquisition of the Alani Nu energy drink and the divestiture of Rockstar beverages.
Pepsi’s North American food business reported volume growth of 2% for the quarter, while the North American beverage business reported that volume fell 2.5%.
PepsiCo makes soft drinks such as Mountain Dew and Pepsi, as well as potato chips, Quaker oatmeal, and sports drink Gatorade.
Looking ahead, PepsiCo said it plans to “restage” the Gatorade brand in an attempt to boost sales of the sports drink.
Management said they plan to market Gatorade’s hydration benefits to non-athletes, release a lower sugar version of the drink, and start to remove artificial colors, among other changes.
In terms of guidance, PepsiCo reiterated its previous forecast that calls for organic revenue to rise between 2% and 4%.
PEP stock has risen 10% in the last year to trade at $154.85 U.S. per share.
