PepsiCo, Inc. (NYSE: PEP) reported growth in volume, revenue, operating profit and earnings per share for the second quarter of 2011 driven by top-line gains across its worldwide snacks and beverage businesses, and from the acquisition of Wimm-Bill-Dann (WBD), the leading dairy and juice company in Russia.
"Our global portfolio in both snacks and beverages is growing volume and net revenue, our global snacks portfolio, in particular, posted another strong quarter with balanced top- and bottom-line growth, and we continue to enjoy robust top-line growth in key emerging markets," said PepsiCo Chairman and CEO Indra Nooyi.
"While we are satisfied with the performance of our portfolio overall, the consumer in developed markets continues to be stressed, and the competitive environment in North America beverages has been particularly challenging. We are therefore implementing previously announced incremental pricing actions in the third quarter to more fully cover input costs while continuing to support our brand-building initiatives. We remain confident in our ability to continue to profitably grow our overall business, even in this uncertain economic environment."
Worldwide servings growth was 6 percent in the quarter and 7 percent year to date, with strength across the Company's diverse snacks and beverage portfolio.
Worldwide snacks volume increased 10 percent reflecting broad-based gains in the snacks portfolio and the impact of the WBD acquisition. Excluding the WBD impact, snacks volume gained 4 percent.
Worldwide beverage volume increased 5 percent, including a 3-percentage-point impact from the WBD acquisition and despite challenging conditions in the North American beverage market. Volume performance was led by growth in emerging markets, where organic volume increased 9 percent in snacks and 4 percent in beverages.
Net revenue increased 14 percent reflecting the benefits of organic volume growth, effective net pricing, and favorable foreign exchange. Net revenue grew 8 percent on an organic basis.
Reported total operating profit increased 12 percent, reported net income increased 18 percent and reported EPS increased 20 percent.
Core operating profit increased 5 percent, reflecting the benefits of net revenue gains, synergies from the anchor bottler acquisitions, productivity, favorable foreign exchange and the impact of the acquisition of WBD, offset somewhat by higher commodity and operating costs. Core EPS of $1.21 increased 10 percent driven by operating profit growth and a lower year-over-year core income tax rate.
PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that generate more than $1 billion in annual retail sales each. Our main businesses—Quaker, Tropicana, Gatorade, Frito-Lay, and Pepsi Cola—also make hundreds of other enjoyable foods and beverages that are respected household names throughout the world. With net revenues of approximately $60 billion, PepsiCo's people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo's promise to provide a wide range of foods and beverages for local tastes; to find innovative ways to minimize our impact on the environment, including by conserving energy and water usage, and reducing packaging volume; to provide a great workplace for our associates; and to respect, support, and invest in the local communities where we operate. For more information, please visit www.pepsico.com.