PepsiCo adjusts its full year growth target after strong Q2 2015
Business is full of ups and downs, and some years overall are better than others. Global soft drinks and snacks giant (and Frito-Lay parent company) PepsiCo is having an exceptionally good year. It’s such a good year for PepsiCo in fact that, after posting its second quarter FY 2015 results, the company has decided to increase its projected year end growth target.
For its second quarter PepsiCo reported net revenue of $15.92 billion and organic revenue growth of 5.1 percent—this growth exceeds the 4.4 percent organic revenue growth of first quarter 2015. In light of this progress, PepsiCo made the decision to raise its full year core constant currency EPS growth target to 8 percent (the previous target for year end was 7 percent).
"Our results reflect our keen focus on innovation, brand building and marketplace execution,” said PepsiCo CEO Indra Nooyi in a press release addressing the quarterly report. “Through scientific R&D and strategic insights, we are developing sustainable innovation to offer consumers the range of food and beverage choices they're looking for and creating a powerful platform for growth. As a result, we continue to drive growth for our retail partners.”
PepsiCo’s growth isn’t just good for PepsiCo: the company’s earnings report also states that PepsiCo products have been a strong growth driver for its retail partners as well, especially in the domestic market. “Notably, in the second quarter, PepsiCo was once again the largest contributor to retail sales growth in the U.S., our largest market, among all food and beverage manufacturers, with over $400 million of retail sales growth in all measured channels,” states the report, citing data collected by market research company IRi.
With two strong quarters behind it, PepsiCo is ready for even further growth in the quarters and years to come. “We remain on track to deliver our 5 year, $5 billion productivity savings through 2019,” said Nooyi. "We believe we have the right strategies in place to continue delivering strong constant currency operating results and healthy cash returns to shareholders."
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