Photo by NIKHIL on Unsplash

PepsiCo Inc (PEP) reported first-quarter FY22 sales growth of 9.3% year-on-year to $16.2 billion, beating the consensus of $15.53 billion.

Net revenue from Frito-Lay North America increased 14% Y/Y, Quaker Foods North America rose 11%, and PepsiCo Beverages North America climbed 5.5%. Latin America sales rose 19% Y/Y.

The gross profit increased 7.6% Y/Y to $8.8 billion, and the profit margin fell 87 basis points Y/Y to 54%.

The operating margin expanded 1,692 basis points to 32.5%, and operating income for the quarter jumped 127.8% to $5.3 billion.

The company held $6.9 billion in cash and equivalents as of March 19, 2022.

Adjusted EPS of $1.29 beat the analyst consensus of $1.23.

Outlook

PepsiCo continues to expect FY22 core constant currency EPS growth of 8%. The assumption implies FY22 core EPS of $6.63 (consensus $6.65), a 6% increase compared to 2021 core EPS of $6.26.

PEP expects to deliver 8% organic revenue growth (versus previous guidance of 6%) for FY22.

Pepsico expects total cash returns to shareholders of $7.7 billion, comprised of dividends of $6.2 billion and share repurchases of $1.5 billion.

Price Action: PEP shares are trading lower by 0.48% at $172.90 in premarket on the last check Tuesday.