Purchase, N.Y.-based PepsiCo Inc. reported results for the second quarter of fiscal 2017.
“Our results for the second quarter were very much in line with our expectations, and we remain on track to meet our 2017 financial goals,” Chairman and Chief Executive Officer Indra Nooyi said in a statement. “The power and durability of our brand and product portfolios, strong marketplace execution and the balance of our geographic footprint enabled us to deliver strong operating results in the midst of pockets of macroeconomic challenges and increasingly dynamic retail and consumer landscapes.”
Reported second quarter 2017 and 2016 results were impacted by restructuring charges in conjunction with the multi-year productivity plan that was announced in 2014, the company says.
In second quarter 2017, reported net revenue increased 2 percent. Foreign exchange translation had a 1.5-percentage-point unfavorable impact on reported net revenue, it says. Organic revenue grew 3.1 percent, it adds.
The North America Beverages (NAB) division was positively impacted by productivity gains, higher operating results from joint ventures, insurance adjustments, a favorable legal settlement and favorable settlements of promotional spending accruals compared with 2016, the company says. Higher prior-year restructuring and impairment charges increased operating profit by 1 percentage point, it adds.
Year-to-date reported net revenue increased 1.8 percent, the company says. Foreign exchange translation had a 1-percentage-point unfavorable impact on reported net revenue. Organic revenue grew 2.6 percent, it adds.
Reported operating profit increased 7 percent and core constant currency operating profit increased 4 percent year-over-year, it says. The transaction with Tingi-Asahi Beverages Holding Co. Ltd. in 2016 had an 8-percentage-point favorable impact on reported operating profit growth. Commodity market-to-market adjustments reduced reported operating profit growth by 4 percentage points, while foreign exchange translation reduced reported operating profit growth by 2 percentage points. The Britvic gain had a 2-percentage-point favorable impact on reported and core operating profit growth, it adds.
Year-over-year, PepsiCo NAB was positively impacted by productivity gains, lower raw material costs, higher operating results from joint ventures, favorable settlements of promotional spending accruals compared with the prior year and insurance adjustments, the company says. The impacts were partially offset by operating cost inflation, it adds.
For the year, PepsiCo expects organic revenue growth of at least 3 percent, it says. BI