Por Uday Sampath Kumar
Jul 13 (Reuters) – PepsiCo Inc announced on Tuesday that it will raise prices for its products this year, after raising its profit forecast for 2021 on rising demand for its soft drinks from pandemic-weary people flocking to restaurants and cinemas.
A number of factors, including disruptions to global supply chains and increased demand, have driven up commodity prices, forcing packaged food companies such as PepsiCo and rival Coca-Cola Co. to pass the costs on to consumers.
The inflationary trend was evident in the latest data set, which showed consumer prices in the United States rose to 13-year highs in June.
PepsiCo’s move to raise prices, which would take place after U.S. Labor Day on the first Monday in September, will also be used to offset higher advertising and marketing costs, which rose 30% in the quarter. , a period when the company sought to take advantage of the reopening of the US economy, its chief financial officer Hugh Johnston told Reuters.
Net income from beverage sales to schools, restaurants, stadiums and other similar businesses in North America doubled in the second quarter.
Overall net income increased 20.5% to $ 19.22 billion in the quarter ended June 12, above expectations of $ 17.96 billion, according to Refinitiv IBES data.
Excluding items, PepsiCo earned $ 1.72 per share, above estimates of $ 1.53 per share. The company expects fiscal 2021 structural earnings per share to rise 11%, compared to the previous forecast of a single-digit increase.
Johnston further said that potential job losses due to automation will be more than offset by job growth in other areas of the company.