PepsiCo reports second-quarter 2021 results

PURCHASE, N.Y. - July 13, 2021 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the second quarter 2021.

“We are pleased with our second quarter results as we delivered very strong double-digit net revenue and earnings per share growth. Given the strength of our results, we now expect our full year organic revenue to increase 6 percent and core constant currency earnings per share to increase 11 percent,” said Chairman and CEO Ramon Laguarta.

Laguarta continued, “Our results give us confidence that the investments behind our Faster, Stronger and Better framework are working - as we invest in our brands, supply chain and go-to-market systems, manufacturing capacity, capabilities and culture, and our society by integrating purpose into everything we do. Moving forward, we remain focused on winning in the marketplace and building competitive advantages that will position us well as consumer habits and preferences evolve over time. ”PepsiCo Extends Restructuring Initiatives

To build on the successful implementation of the 2019 Productivity Plan to date, the Company announced an expansion and extension of this program through the end of 2026. The expansion of the program reflects further initiatives to leverage new technology and business models to further simplify, harmonize and automate processes; re-engineer our go-to-market and information systems, including deploying the right automation for each market; and simplify our organization and optimize our manufacturing and supply chain footprint. As a result, we are extending our target to deliver at least $1 billion in annual productivity savings through 2026.

In connection with this effort, we now expect to incur pre-tax charges of approximately $3.15 billion, including cash expenditures of approximately $2.4 billion, as compared to our previous estimate of pre-tax charges of approximately $2.5 billion, which included cash expenditures of approximately $1.6 billion.

We have incurred pre-tax charges of $874 million through June 12, 2021.

Guidance and Outlook

The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.

The Company now expects to deliver 6 percent organic revenue growth (versus our previous guidance of mid-single-digit growth) and 11 percent core constant currency EPS growth for fiscal year 2021 (versus our previous guidance of high-single-digit growth).

Consistent with its previous guidance for 2021, the Company continues to expect:

•A core annual effective tax rate of approximately 21 percent; and

•Total cash returns to shareholders of approximately $5.9 billion, comprised of dividends of approximately $5.8 billion and share repurchases of $106 million. We completed our share repurchase activity and do not expect to repurchase any additional shares for the balance of 2021.

In addition, the Company continues to expect a 1-percentage-point foreign exchange translation tailwind to benefit reported net revenue and core EPS growth based on current market consensus rates.

This assumption and the guidance above imply 2021 core EPS of approximately $6.20, a 12 percent increase compared to 2020 core EPS of $5.52.