PepsiCo raises outlook, looks to new Lay's flavors - KSWO 7News | Breaking News, Weather and Sports

PepsiCo raises outlook, looks to new Lay's flavors

PURCHASE, N.Y. (AP) - PepsiCo raised its forecast for the year on Wednesday and said its new Lay's potato chips - including a cappuccino variety - should help boost its profit in the months ahead.

The company, which also owns Tropicana, Gatorade and Quaker, said global volume for both its snacks and drinks rose 1 percent in the second quarter. The gains were relatively modest, but PepsiCo has been driving its financial performance with a cost-cutting plan expected to generate $1 billion in savings this year.

In its Frito-Lay North America division, PepsiCo said lower prices helped lift sales volume. Although the performance was muted, Chief Financial Officer Hugh Johnston noted in a phone interview that the unit is expected to benefit in the current quarter from the rollout of special flavors - Cappuccino, Mango Salsa, Wasabi Ginger and Bacon Mac & Cheese.

The varieties were recently announced as finalists for the company's annual "Do Us a Flavor" contest, which gives customers a chance to create a new variety that is sold nationwide. The chips have so far received mixed reviews, but the contest is designed to pique curiosity and drive people to stores.

Johnston said such special flavors are also more profitable for the company, even if the prices are the same as regular flavors. That's because PepsiCo puts fewer chips in those bags.

"There might be an ounce or two less," Johnston said.

A representative for PepsiCo said regular Lay's come in 10-ounce bags and flavored Lay's come in 9.5-ounce bags. At those sizes, all bags have a suggested price of $4.29.

In its closely watched North American beverage business, soda volume fell 2 percent while non-carbonated drinks rose 1 percent. On Monday, Coca-Cola also said non-carbonated drinks rose 1 percent, while soda volume was flat. The two companies have been struggling to boost beverage volumes in the region, given the growing competition from smaller players and the shift away from soda that has been underway for years.

PepsiCo now expects core earnings per share to rise 8 percent from 2013, instead of the 7 percent increase it previously forecast.

For the quarter, the Purchase, New York-based company said net income fell to $1.98 billion, or $1.29 per share. That was down 2 percent from a year ago, as restructuring and impairment charges took their toll.

Adjusted for one-time charges, earnings were $1.32 per share, topping the $1.23 analysts expected, according to Zacks Investment Research.

Revenue edged up to $16.89 billion, matching Wall Street forecasts.

PepsiCo shares have increased $6.23, or 7.5 percent, to $89.17 since the beginning of the year, while the Standard & Poor's 500 index has climbed 7.3 percent. The stock has climbed $2.97, or 3.4 percent, in the last 12 months.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

  • Local NewsNewsMore>>

  • breaking

    Multiple people, including child, shot outside Canadian restaurant

    Multiple people, including child, shot outside Canadian restaurant

    Sunday, July 22 2018 11:44 PM EDT2018-07-23 03:44:54 GMT
    Sunday, July 22 2018 11:44 PM EDT2018-07-23 03:44:54 GMT

    At least 10 victims are being taken to trauma centers.

    At least 10 victims are being taken to trauma centers.

  • Gunman in Trader Joe's standoff was feuding with grandmother

    Gunman in Trader Joe's standoff was feuding with grandmother

    Sunday, July 22 2018 8:49 AM EDT2018-07-22 12:49:27 GMT
    Sunday, July 22 2018 11:30 PM EDT2018-07-23 03:30:33 GMT
    (AP Photo/Damian Dovarganes). Los Angeles Police SWAT officers escort a group of people who were held for their safety by police across businesses surrounding a Trader Joe's supermarket, after a gunman held dozens of people hostage inside the store bef...(AP Photo/Damian Dovarganes). Los Angeles Police SWAT officers escort a group of people who were held for their safety by police across businesses surrounding a Trader Joe's supermarket, after a gunman held dozens of people hostage inside the store bef...

    Police say they're trying to determine what prompted a man to shoot his grandmother and then run into a busy Los Angeles supermarket and hold dozens of people hostage for hours.

    Police say they're trying to determine what prompted a man to shoot his grandmother and then run into a busy Los Angeles supermarket and hold dozens of people hostage for hours.

  • Inspector warned duck boat company of design flaws last year

    Inspector warned duck boat company of design flaws last year

    Saturday, July 21 2018 6:13 PM EDT2018-07-21 22:13:06 GMT
    Sunday, July 22 2018 11:28 PM EDT2018-07-23 03:28:28 GMT
    (AP Photo/Charlie Riedel). People view a row of idled duck boats in the parking lot of Ride the Ducks Saturday, July 21, 2018 in Branson, Mo. One of the company's duck boats capsized Thursday night resulting in several deaths on Table Rock Lake.(AP Photo/Charlie Riedel). People view a row of idled duck boats in the parking lot of Ride the Ducks Saturday, July 21, 2018 in Branson, Mo. One of the company's duck boats capsized Thursday night resulting in several deaths on Table Rock Lake.

    Since 1999, duck boats have been linked to the deaths of more than 40 people, with a troubled safety record on the road and water alike.

    Since 1999, duck boats have been linked to the deaths of more than 40 people, with a troubled safety record on the road and water alike.

Powered by Frankly