PepsiCo Q4 Results: Strong set of numbers beating estimates

PepsiCo Q4

Revenue increase - PepsiCo, global food and beverages company, reported net revenue of $25,248, a growth of 12.4% YoY. It is also above analysts' estimate of $24,285 million in net revenue. The revenue growth was driven by volume growth and robust price/mix in the reported quarter. 

Organic revenue - On an organic basis, revenues grew 11.9% YoY driven by broad-based growth across categories and geographies. On a YoY basis, organic revenues grew 11% for the beverage business and 13% for the convenient food business. Region-wise, organic revenues improved 12% for the North American business and 11% for the international business.

Gross Profit - The gross profit increased by 9.1% YoY to $13,118 million. Core gross profit rose 10% YoY to $13,194 million. The reported gross margin contracted 161 basis points (bps) while core gross margin declined 122 bps.

Operating Income - Pepsico reported an operating income of $2,562 million, a decline of 9.3% YoY. Core operating income declined 3.8% year over year to $2,740 million and core constant-currency operating income fell 4%.

Cash - The company ended 2021 with cash and cash equivalents of $5,596 million, long-term debt of $36,026 million, and shareholders’ equity (excluding non-controlling interest) of $16,043 million. Net cash used in operating activities was $11,616 million as of Dec 25, 2021, compared with $10,613 million on Dec 26, 2020.

2022 Outlook - PepsiCo expects to retain the strength and momentum witnessed in 2021. It anticipates organic revenue growth of 6%, which is at the high-end of its long-term target. Core constant-currency earnings per share are expected to increase 8% from a year ago. Consequently, it estimates core earnings per share of $6.67 for 2022, representing a 6.5% increase from $6.26 reported in 2021

Target Price - The 17 analysts offering 12-month price forecasts for PepsiCo Inc have a median target of $180, with a high estimate of $200 and a low estimate of $145.

Pepsico Q4 Results Review:

The company has reported robust Q4 results wherein the bottomline was in line with estimates and revenue was higher than estimates. Both the numbers showed YoY growth. The company benefited from investments in brands, supply chain, go-to-market systems, and digital capabilities to build competitive advantages. Revenues saw growth aided by acceleration across both global beverage and convenient food businesses. The 2022 outlook is also looking good for the company.

PepsiCo's share price closed 2.08% lower on Thursday at $168.37 per share.