What’s Driving PepsiCo’s Growth This Year?

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PepsiCo‘s (NYSE:PEP) net sales through the first three quarters of the year declined 3%, despite a solid 4% organic growth, due to currency headwinds and structural impacts. But what holds positive for the company is its continual reliance on the domestic market. North America (U.S. and Canada) formed just over 63% of PepsiCo’s net revenue through September, and the continual solid performance of the Frito-Lay North America division is what shines brightest among that of other divisions.

Pepsico Q&A 18

Pepsico Q&A 18-1

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Furthermore, PepsiCo derived 8% organic revenue growth in developing and emerging markets in the third quarter, including an 11% growth in China and Mexico, and a surprising 7% revenue growth in Russia, where the consumer is starting to rebound. Strengthening international growth is good news for PepsiCo, and backed by the solid performance of the Frito-Lay North America division, the company could achieve its targeted adjusted EPS growth of 10% for 2016 — an estimate it raised for the second consecutive quarter following the Q3 results announcement.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for PepsiCo

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