PepsiCo reported third quarter revenue grew 13% to $8.18 billion driven by strong performances in its North American beverage business—thanks to a hot summer—and international operations. Revenue rose at its fastest pace since late 2001.
The company expects Hurricanes Katrina and Rita to add to its fourth quarter costs and to possibly negatively affect consumer spending, CEO Steve Reinemund said in a statement. The quarter ended Sept. 3.
Sales at its Frito-Lay North America business grew 6% to $2.5 billion from $2.3 billion one year ago thanks to growth of Lay’s, Cheetos, Tostitos and Quaker snacks. Salty snacks revenue grew 5% on volume growth of more than 2%.
PepsiCo Beverage North America volume increased 8%, led by Gatorade growth. PBNA reported sales of $2.5 billion, compared to $2.1 billion in the year ago quarter. The business saw 24% growth in the non-carbonated category, including double-digit growth in Gatorade, Aquafina and Propel. Above average temperatures across the country helped pump sales as well as new products like Gatorade Lemonade and Aquafina Flavorsplash. Tropicana non-carbonated beverages grew in the low double-digits. Carbonated soft drink volumes were flat with last year. Pepsi and Mountain Dew saw low single-digit declines. Diet CSDs saw mid single-digit growth.
PepsiCo International posted $2.8 billion in revenue versus $2.4 billion one year ago. Snacks volume grew 7%; beverage volume grew 13%.
Quaker Foods North America had a 2% revenue jump to $364 million, driven by the growth of Rice-A-Roni and Life cereal. Volume was flat.
The company increased its support of health and wellness and innovation initiatives by $10 million.
“Looking ahead to the fourth quarter, we are encouraged by the momentum in our businesses, but we expect the recent hurricanes to negatively affect some key input costs and, potentially, consumer spending,” Reinemund said. “We are not unique in having to address these challenges, but clearly must acknowledge them.”
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