PepsiCo, Inc. PEP has reported strong third-quarter 2020 results, wherein earnings and sales surpassed estimates and improved year over year as well. Despite continued challenges related to the coronavirus pandemic, the company’s robust third quarter performance was backed by its resilience and strength in the global snacks and foods business as well as improvement in the beverage category.
The company also gained from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which helped maintain continued supplies amid the coronavirus pandemic.
Shares of this Zacks Rank #3 (Hold) company have inched up 1.4% year to date against the industry’s 8.5% decline.
Quarter in Detail
PepsiCo’s third-quarter core EPS of $1.66 beat the Zacks Consensus Estimate of $1.48 and also increased 6.4% year over year. In constant currency, core earnings were up9% from the year-ago period. The company’s reported EPS of $1.65rose 10% year over year.
PepsiCo, Inc. Price, Consensus and EPS Surprise
PepsiCo, Inc. price-consensus-eps-surprise-chart | PepsiCo, Inc. Quote
Net revenues of $18,091 million improved 5.3% year over year and also surpassed the Zacks Consensus Estimate of $17,288 million. On an organic basis, revenues grew 4.2% year over year. Foreign currency impacted revenues and earnings by 2% and 3%, respectively, in the third quarter. Revenues benefited from continued momentum in snacking category as well as gains in beverage business.
Revenues also reflected gains from strong volume growth and robust pricing during the quarter. Total volume increased 2% in the reported quarter. Notably, organic volume for snacks/food business improved 4% while it slipped2% for the beverage business. Meanwhile, net pricing climbed 3% in the third quarter, driven by strong pricing across almost all segments, except AMESA.
On a consolidated basis, reported gross margin contracted 32 basis points (bps) while core gross margin declined60 bps. Reported operating margin