PepsiCo says no more price hikes after better-than-expected quarterly results

  • Q4 revenue $28 bln vs est $26.84 bln
  • Average prices up 16%, organic volumes down 2%
  • Sees 2023 core EPS $7.20 vs est $7.28

Feb 9 (Reuters) - PepsiCo Inc (PEP.O) said on Thursday it will not raise prices of its sodas and snacks further after multiple rounds of price hikes last year helped the beverage giant post fourth-quarter profit and revenue ahead of analysts' estimates.

A near duopoly in the carbonated drinks market with Coca-Cola Co (KO.N) helped PepsiCo raise prices with little pushback from consumers as it battles higher freight and commodity costs, as well as the impact of a stronger dollar on international revenue.

"We have most of our price increases for the year already in place," PepsiCo Chief Financial Officer Hugh Johnston told Reuters.

While the company expects inflationary pressures to persist in 2023, it still sees consumer demand being resilient.

PepsiCo is in a "real sweet spot" in terms of consumers since they have enough money to buy themselves affordable treats, Johnston said.

Bottles of Pepsi are pictured at a grocery store in Pasadena, California, U.S., July 11, 2017. REUTERS/Mario Anzuoni/File Photo

The slowdown in pricing should ultimately be offset by better volumes and demand for non-alcoholic beverage products are going to remain strong, Wedbush Securities analyst Gerald Pascarelli said.

PepsiCo's shares rose 1.7% to $174.04 after it also raised its annual dividend by 10% to $5.06 per share.

The company's North America beverages unit, which houses brands such as Mirinda, 7UP and Gatorade, posted an organic revenue growth of 10% in the fourth quarter.

Average prices jumped 16%, while organic volume slipped 2%.

The Frito-Lay maker however, forecast annual profit below estimates and said it expects some pushback on prices in the second half of the year.

On an adjusted basis, PepsiCo earned $1.67 per share in the fourth quarter, beating estimates of $1.65, according to Refinitiv data.

Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shounak Dasgupta

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Ananya reports on the U.S. Consumer and Retail Sector covering breaking and business news on publicly listed retailers, apparel makers, cruises, luxury brands, beverage companies and restaurants groups.