PepsiCo revenue climbs 8.8% on strong snacks performance; 2021 results expected to meet long-term targets

PepsiCo Inc. (Nasdaq: PEP) on Feb. 11 reported results for the fourth quarter and full-year 2020. Fed by pandemic snacking and higher sales of drinks like Gatorade Zero and Bubly sparkling water, fourth-quarter earnings beat estimates. The beverage and snacks giant expects its 2021 results to meet long-term financial targets.

“We ended the year on a strong note with our global beverage business having accelerated while our global snacks and food business remained resilient in the fourth quarter,” said chairman and chief executive Ramon Laguarta. “Our results were indicative of the strength and resilience of our highly dedicated employees, diversified portfolio, agile supply chain and go-to-market systems and strong marketplace execution even in the face of difficult Covid-19 challenges.”

PepsiCo 2020 Q4 and FY highlights:

• Net revenue growth was 8.8% for the quarter and 4.8% for the year.
• Foreign exchange impact on net revenue was 2% for the quarter and year.
• Earnings per share (EPS) was $1.33 for the quarter and $5.12 for the year.
• EPS change was 5% for the quarter and 2% for the year.
• Foreign exchange impact on EPS was 2% for the quarter and year.

Frito-Lay North America’s operating profit decreased 4%, primarily reflecting certain operating cost increases and a 5-percentangepoint impact of higher restructuring and impairment charges, partially offset by productivity savings and net revenue growth. Additionally, the charges taken as a result of the novel coronavirus (Covid-19) pandemic negatively impacted operating profit performance by 2 percentage points.

Quaker Foods North America’s operating profit grew 17%, primarily reflecting net revenue growth, productivity savings and lower advertising and marketing expenses, partially offset by certain operating cost increases. Additionally, the charges taken as a result of the Covid-19 pandemic reduced operating profit growth by 2 percentage points. 

PepsiCo Beverages North America’s operating profit grew 19%, primarily reflecting net revenue growth, productivity savings, lower advertising and marketing expenses and a 6-percentage-point impact of lower commodity costs. These impacts were partially offset by certain operating cost increases, including incremental information technology costs, a 3-percentage-point impact of a prior-year gain on an asset sale and a 2-percentage-point impact of the charges taken as a result of the Covid-19 pandemic. Acquisitions contributed 10 percentage points to operating profit growth.

In the fourth quarter, PepsiCo said it received notice of termination without cause from Vital Pharmaceuticals Inc., which would end its distribution rights of Bang Energy drinks, effective Oct. 24, 2023.

Go here to see PepsiCo’s full financial report with summary charts and consolidated statements of income.