PURCHASE, N.Y. (AP) — PepsiCo's decision to cut prices and some new snacks boosted demand in the first quarter.
Revenue jumped 8.5% to $19.44 billion in the January-March period compared to the same period a year ago, the Purchase, New York, company said Thursday. That handily beat Wall Street’s forecast of $18.95 billion, according to analysts polled by FactSet.
PepsiCo began cutting prices on value brands like Chester's and Santitas last spring to win back customers exasperated by years of price hikes. Under pressure from Elliott Investment Management, an activist investor, the company agreed to accelerate those price cuts.
In February, ahead of the Super Bowl, PepsiCo said it would slash prices on Lay’s, Doritos, Cheetos and Tostitos chips by up to 15%. At a Michigan Walmart on Thursday, a 9.25-ounce bag of Doritos was advertising a price rollback to $3.97, down from $4.48.
PepsiCo said new products like Cheetos NKD and Doritos NKD, which have no artificial ingredients, and snacks with enhanced ingredients, like Smartfood FiberPop and Doritos Protein, are also attracting shoppers.
Net income rose 27% to $2.33 billion for the quarter. Adjusted for one-time items, the company earned $1.61 per share. That also beat Wall Street’s forecast of $1.54 per share.
PepsiCo shares are flat in premarket trading.
