PepsiCo sees strong annual profit as homebound buyers splurge on snacks

FILE PHOTO: Bottles of Pepsi are pictured at a grocery store in Pasadena, California, U.S., July 11, 2017. REUTERS/Mario Anzuoni

(Reuters) – PepsiCo Inc PEP.O forecast full-year profit above market expectations on Thursday as homebound consumers buy more of its snack foods and drinks, sending its shares up more than 2%.

People spending more time working from home and taking online classes due to COVID-19 crisis has led to rise in demand for salty snacks, boosting demand for PepsiCo’s Tostitos, Cheetos and Doritos from households across North America.

Sales of snacks under the company’s Frito-Lay North America unit rose 7% in the third quarter, while higher demand for breakfast foods led to a 6% rise at its Quaker Foods business.

Overall net revenue rose more than 5% to $18.09 billion in the quarter ended Sept. 5, beating analysts’ average expectation of $17.23 billion, according to IBES data from Refinitiv.

It forecast full-year core earnings of $5.50 per share, above expectations of $5.36 per share.

In the reported quarter, net profit attributable to the company rose to $2.29 billion, or $1.65 per share, from $2.1 billion or $1.49 per share, a year earlier.

Excluding items, the company earned $1.66 per share, beating market expectation of $1.49 per share.

Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur