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Apr, 27 2018

Pepsi gets sales Boost from snack segment

Core earnings were 96 cents a share in the latest quarter, beating the 93 cents that analysts were expecting.

The iconic American beverage maker PepsiCo’s has posted sales and earnings beating analysts’ estimates in the first quarter, buoyed by increased volumes of Frito-Lay chips as the drinks business continued to struggle.

PepsiCo, like rival Coca-Cola, has focused on introducing new, innovative drinks and products. But it was food brands that drove gains in the quarter.

The beverage-maker had previously said it had shifted its spending too far in the direction of upstarts and away from its biggest names, so it has since refocused attention on its most recognizable labels.

Core earnings were 96 cents a share in the latest quarter, beating the 93 cents that analysts were expecting. Revenue was $12.6 billion, compared with a forecast $12.4 billion. The results are a promising sign, although the North America beverage division is still beset as consumer tastes shift away from colas.

Consumption of carbonated soft drinks fell to a 31-year low in the US in 2016, according to Beverage-Digest, a trade publication. PepsiCo has relied instead on growth in its snack business. Health conscious consumers who have moved away from sugar-laden sodas haven’t made the same moves away from chips.

PepsiCo has also introduced organic and better-for-you versions of some of its biggest snack brands. Growth in the Frito-Lay division helped boost sales in the quarter. The maker of Mountain Dew and Cheetos also benefited from cost cuts as chief executive officer Indra Nooyi continues pursuing at least $1 billion in annual savings.

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