PepsiCo Inc. raised its full-year revenue forecast on Tuesday and said it could increase prices further in the coming months, with the beverage giant seeing little impact on demand for its sodas and snacks despite decades-high inflation.
The company’s shares rose 1.5 percent to $173 in morning trading.
Pandemic-induced disruptions to the global supply chain and surging raw material costs forced PepsiCo, like other packaged food makers, to increases prices for its products, and some retailers have pushed back against those hikes citing waning consumer demand.
However, PepsiCo Chief Financial Officer Hugh Johnston told Reuters the company had not seen any slowdown in demand in response to its price hikes, largely implemented late last year, and that there was room for prices to go further up.
“In a world where we’re seeing things like vegetable oil, grains and packaging prices increasing dramatically, I would be surprised if there wasn’t more (price increase) over the course of the next year,” Johnston said.
The company’s second-quarter net revenue rose 5.2 percent to $20.23 billion, beating estimates of $19.51 billion, according to IBES data from Refinitiv. It also beat profit estimates.
Johnston added that the company was having “constructive conversations” with most retailers about passing on price hikes to consumers.
Earlier this year, PepsiCo’s snack brands briefly disappeared from shelves at Canadian grocer Loblaw Cos Ltd. after the two companies sparred over price increases.
PepsiCo said it expects fiscal 2022 organic revenue, which strips out the impact of currency fluctuations, to rise 10 percent, compared with a previous forecast of an 8 percent increase.
The company was also looking at cutting costs with cheaper packaging and a more cautious hiring approach, Johnston said.
PepsiCo recorded a $1.4 billion charge in the second quarter, primarily related to the write down of some assets due to the Russia–Ukraine conflict.
