Pepsico/Frito-Lay releases First quarter results

PepsiCo, Inc. (NYSE: PEP) today reported first-quarter 2009 results that reflected solid top- and bottom-line performance on a constant currency basis.

The company delivered 6 percent constant currency net revenue growth. The company's first-quarter constant currency core EPS grew 8 percent, reflecting strong net revenue management, product innovation and cost discipline. Reported EPS grew 3 percent and reported net revenue declined 1 percent.
 

Indra Nooyi, PepsiCo Chairman and Chief Executive Officer, said: "I am pleased with PepsiCo's overall performance in the quarter. Our portfolio breadth, geographic reach and operating agility enabled us to deliver strong performance in a challenging global macroeconomic environment. Worldwide, our teams adapted their operating models - from refreshing our beverage lineup, to devising new value initiatives, to enhancing revenue management and expanding Power of One initiatives."

Some highlights related to the savory snack (Frito-Lay) results:

On a constant currency basis, Frito-Lay North America (FLNA) had excellent results with 12 percent growth in both net revenue and core operating profit, driven by net revenue management and cost discipline. Volume was down less than 1 percent, primarily due to weight outs to cover commodity cost inflation. Frito-Lay U.S. retail unit sales grew low-single-digits, reflecting strong in-store programming, consumer promotions and marketing campaigns.

As part of its continuing commitment to deliver value to consumers, FLNA recently began to add 20 percent more product into its take-home sized Doritos, Tostitos, Cheetos and Fritos products, without increasing the price.

On a constant currency basis, Latin America Foods (LAF) net revenue grew 11 percent and core operating profit grew 27 percent. Net revenue and core operating profit growth resulted from pricing actions, including weight outs, and disciplined cost control. Value-oriented promotions, such as Sabritas' "Money in the Bag"campaign in Mexico, supported pricing actions to offset both commodity inflation and transaction foreign exchange headwinds.

Volume declined 5.5 percent in the quarter as a result of fewer trading days, a shift in the Easter holiday to the second quarter, and pricing actions to cover commodity inflation.

Europe division snacks volume grew 1 percent, including 3 percentage points of growth from the Marbo acquisition. Volume growth was partially offset by the adverse impact of planned weight outs in response to higher input costs and 2 fewer trading days in key markets.

Russia snacks achieved low-double-digit volume growth as a result of improved distribution and the strength of locally relevant brand extensions and product innovation, such as Red Caviar flavored Lay's potato chips. In the United Kingdom, Walkers grew value share across all channels through pricing discipline and the success of its "Do Us a Flavour"promotion.

The Asia/Middle East/Africa (AMEA) division grew snack volume by 8 percent in the first quarter, building on strong performance in the year-ago period. Volume growth was driven by low-double-digit growth in emerging markets, such as the Middle East, and high-single-digit growth in India and China. These gains were partially offset by a high-single-digit decline in South Africa.

Globally, snack volume sold decreased 1%