Rising Demand for Food Fuels Strong Q1 Performance for Pepsi

By Adriaan Brits Thursday, April 15, 2021

PepsiCo reported better-than-expected earnings for Q1, driven by a continued surge in demand for snacks and beverages amid the COVID-19 pandemic.

A can of Pepsi on a bed of ice.

Strong Results on Higher Demand for Its Products

Pepsi stock climbed nearly 1% in pre-market trading on the back of the better-than-expected Q1 earnings. Pepsi reported adjuster earnings per share (EPS) of $1.21, compared to analysts’ estimates of $1.12 per share. This marks another quarter beat after the company delivered stronger-than-expected results for Q4 2020.

Business revenue came in at $14.82 billion versus the expected $14.55 billion. The company said it made $1.71 billion in net income in Q1. Net sales surged by 6.8% to $14.82 billion, beating the expected $14.55 billion, while organic revenue was up 2.4% in Q1.

“Our results are indicative of the strength and resilience of our highly dedicated employees, diversified portfolio, agile supply chain and go-to-market systems and strong marketplace execution. And we remain fully committed to executing against our key set of priorities to become a Faster, Stronger and Better organization and win in the marketplace,” Chairman and CEO Ramon Laguarta said in a press release.

The company reported organic revenue for its business unit Frito-Lay rose by 3% in North America, fueled by the launch of new products, including Doritos 3D Crunch and Cheetos Crunch Pop Mix. Still, Frito Kay’s profits took a hit as a result of winter storms in February.

On the other hand, revenue in the business unit Quaker Foods North America climbed 1% in Q1, helped by the at-home breakfast trend, which could soon fade away as more consumers return to their workplaces.

As for its performance outside of North America, Pepsi reported mixed results as certain markets battled with new virus variants and fresh lockdown measures. For instance, organic business revenue in Europe remained relatively flat compared to last year, while revenue in the Africa, Middle East, and South Asia Region slid 1%.

Organic revenue in Latin America climbed 3%, while the Asia Pacific, Australia and New Zealand, and China Region rose as much as 18%.

Pepsi reiterated its outlook for this year, estimating mid-single-digit organic revenue increase and high-single-digit constant currency EPS.
“Following our first quarter results, we have greater confidence in delivering on our financial guidance for the full year,” Laguarta added.
The company expects robust business sales results from its beverages business in North America as more and more consumers return to restaurants and cinemas after the pandemic. However, Pepsi estimated moderate demand for its Quaker Foods products.

In March, the company launched a new lineup of energy drinks called “Mtn Dew Rise Energy.” LeBron James, a basketball superstar, will be the face of this line after signing an endorsement business deal with the company earlier this year after spending the last 18 years with Pepsi’s key rival Coca Cola.


Pepsi reported stronger-than-expected earnings and revenue for its Q1, fueled by a surge in demand for food and beverage products amid ongoing stay-at-home trends. Pepsi stock is up in pre-open Thursday as the company said that it has “greater confidence” in meeting its 2021 goals after a strong performance in Q1.

About the Author

Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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