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What Drove PepsiCo’s 2Q17 Earnings?

PART:
1 2 3 4 5 6 7
Part 3
What Drove PepsiCo’s 2Q17 Earnings? PART 3 OF 7

How PepsiCo’s Segments Performed in 2Q17

Overall performance

With the exception of the Asia, the Middle East, and North Africa, as well as the Quaker Foods North America segments, all of PepsiCo’s (PEP) segments delivered higher reported revenue in fiscal 2Q17.

How PepsiCo’s Segments Performed in 2Q17

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Segment revenue growth

In fiscal 2Q17, the revenue of PepsiCo’s Europe Sub-Saharan Africa segment rose 5.7% to $2.8 billion. Higher pricing had a three percentage point favorable impact on the segment’s top-line growth. Higher volumes, particularly of snack food, had a 2.5 percentage-point positive impact on the segment’s revenue growth.

The Frito-Lay North America segment’s revenue rose 3.2% to $3.7 billion in fiscal 2Q17. This growth was driven by higher volumes and pricing. The segment’s 1.0% volume growth was a result of high-single-digit growth in variety packs, double-digit growth in the Ruffles brand, and low-single-digit growth in the Cheetos brand.

The revenue of PepsiCo’s North America Beverages segment rose 1.9% to $5.2 billion in fiscal 2Q17. The revenue growth of PepsiCo’s largest segment resulted primarily from higher pricing.

The fiscal 2Q17 revenue of the Latin America segment rose 6.2% to $1.8 billion. This growth was mainly driven by higher net pricing, which offset the impact of a net volume decline. The segment’s top-line growth was also adversely impacted by the refranchising of a portion of the company’s beverage business in Colombia.

The revenue of PepsiCo’s Asia, Middle East and North Africa segment fell 8.4% to $1.6 billion owing to significant currency headwinds and lower beverage volumes. Quaker Foods North America’s revenue fell 1.4% to $0.6 billion in fiscal 2Q17. The segment’s performance was negatively impacted by an unfavorable mix and currency headwinds.

We’ll discuss PepsiCo’s beverage volumes in the next part of this series.

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