Investors Can Thank Potato Chips for Pepsi’s Standout Quarterly Profitability

Despite declining demand for its drinks and food, PepsiCo recently posted quarterly profitability and revenue that exceeded analysts' estimates.

Investors should give credit to potato chips for Pepsi's exceptional quarter. Among others, Lay's saw a 14% increase in both revenue and profit. The company reported double-digit revenue increases for products including Ruffles. To maintain its high snacking sales, Pepsi has been creating new packaging sizes, adding its “Flamin' Hot” flavor to brands throughout the division, and introducing Frito-Lay Minis.

Pepsi recently reported second-quarter earnings per share of USD1.99 on revenue of USD22.3bn, exceeding analysts surveyed by FactSet's prediction of USD1.96 per share and USD21.7bn in revenue.

Pepsi now anticipates organic sales growth of 10% and EPS growth of 12% for the entire year. The company had anticipated sales growth of 8% and EPS growth of 9% for the quarter ending in April, which was likewise marked by a beat and increase.

“We are very pleased with our performance for the second quarter as our business momentum remains strong. Moving forward, we will look to elevate our focus on productivity initiatives to further support investments in innovation, brand building, digitalization, and sustainability to win in the marketplace and fortify our businesses for the long-term,” Chairman and CEO, Ramon Laguarta, mentioned.