Pepsi soft drinks are displayed in a supermarket in San Francisco, California.
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PepsiCo reported Monday that quarterly earnings declined as fewer consumers bought their drinks in restaurants or convenience stores as a result of the coronavirus pandemic.
The company saw growth for its foods such as cheetos and oatmeal in the quarter.
The company's shares rose 2% in premarket trading.
Pepsi said that there would be no outlook for 2020 at the time, referring to the continued volatility and uncertainty surrounding the pandemic.
Compared to Wall Street expectations, the company reported on a Refinitiv analyst survey:
Earnings per share: $ 1.32, adjusted vs. $ 1.25 expected Revenue: $ 15.95 billion expected versus $ 15.38 billion
In the second quarter ended June 13, Pepsi reported net income of $ 1.65 billion, or $ 1.18 per share, after $ 2.04 billion or $ 1.44 per share in Previous year.
CEO Ramon Laguarta said the company spent nearly $ 400 million on pandemic related costs, including personal protective equipment for employees. CFO Hugh Johnston said in CNBC's Squawk Box that these additional costs are likely to decrease in the future.
Excluding items, the company earned $ 1.32 per share, exceeding the refinitive analysts' expected $ 1.25 per share.
Net sales decreased 3.1% to $ 15.95 billion and exceeded expectations of $ 15.38 billion. The company's organic sales, excluding foreign currencies, acquisitions and divestitures, decreased 0.3%.
PepsiCo's North American beverage unit saw organic sales decrease 7% despite growth in supermarkets and dollar stores. The closure of restaurants, cinemas and sports stadiums weighed on business, but not all drinks suffered. Pepsi Zero Sugar and Bubly saw double-digit sales growth.
Quaker Foods North America saw organic sales grow 23% as consumers bought more oatmeal for breakfast and baking. Laguarta said that consumers continued to buy these items even though the economies opened at the end of the quarter. The company has drawn up a marketing plan for the rest of the year to keep these sales going, including the introduction of Cheetos Mac and Cheese.
Frito-Lay North America saw organic sales growth of 6%.
Outside of North America, the company posted declining organic sales in the Europe and Africa, Middle East and South Asia segments. Organic sales in Latin America remained unchanged, while the Asia-Pacific, Australia, New Zealand and China segments saw organic sales growth of 15%.
Laguarta said the company saw signs of improvement in May and June when many economies started to reopen and consumers resumed some of their previous habits.