LONDON (ShareCast) - (Sharecast News) - PepsiCo lifted its full-year profit forecast again on Tuesday as it posted a jump in third-quarter sales, thanks mainly to price hikes.
Third-quarter revenue rose 7% to $23.5bn, as prices increased 11%.

The drinks company said it now expects 2023 core earnings per share of $7.54, up from previous guidance of $7.47, and compared to $6.79 in 2022.

Chairman and chief executive Ramon Laguarta said: "We are pleased with our performance as our businesses and associates displayed tremendous agility and resilience across geographies and categories in an evolving and dynamic environment.

"Given the strength of our businesses and categories and a continued focus on advancing our holistic cost management initiatives, we now expect our full-year 2023 core constant currency EPS to increase 13% (previously 12%) and continue to expect our full-year 2023 organic revenue to increase 10%."

In addition, PepsiCo said it expects full-year 2024 organic revenue and core constant currency EPS growth to be towards the upper end of its long-term targets.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "It's been another solid quarter for Pepsi, which saw its top line bubble up at a time when consumers are really feeling the pinch. The group's been leaving itself room to hit, and even surpass, its own guidance this year. That's seen organic revenue guidance get upgraded two times, from 6.0% to 10.0%.

"Sales increased across all regions third quarter, driven almost entirely by price hikes."

However, Chiekrie also cautioned that investors should keep an eye on the rate of sales growth, which has been flattening over the year.

"To some extent, that's to be expected as tough comparative periods roll through. But constant price hikes are beginning to take their toll, having negative impacts on food volumes which is causing some concern in the market and has seen Pepsi's valuation move lower in recent months.

"The rate of price hikes is likely to slow moving forward to help bring some stability back to the volume picture. But good progress is being made on cost-cutting initiatives which is helping to offset this and keep Pepsi's underlying operating profit growing at double-digit rates."

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