PepsiCo, the beverage and snack maker, posted a big jump in quarterly profit on Thursday, despite signs that customers are buying fewer cans of soda and bags of chips as the company continues to aggressively raise prices.
The maker of Gatorade, Lay’s and Quaker Oats also raised its earnings forecast for the rest of the year, sending its stock higher.
company mentioned 10 percent growth in revenue, to $22.3 billion, and nearly doubling its profits since the same time last year, to $2.7 billion, in the second quarter, which ended June 17. PepsiCo said it expects revenue to grow 10 percent for the full year, up from its previous forecast of 8 percent.
Quarterly results beat analysts’ already optimistic expectations, and the gains come as consumers grapple with rising prices and policymakers weigh their next step in their efforts to tame inflation.
Although PepsiCo had more profits last quarter, the amount of products it sold decreased. Pepsi product prices have increased by double-digit percentages over the past six quarters, and the company has reported lower sales volume over the past three quarters.
Pepsi prices in general rose 15 percent in the second quarter, compared to the same quarter a year ago. The increase was particularly evident in PepsiCo’s European division, up 20 percent. Soaring food prices in Europe have attracted particular scrutiny from economists and policymakers, who said corporate earnings were contributing to high inflation there.
“We’ve been able to raise prices and consumers stay within our brands,” PepsiCo CEO Ramon Laguarta said on a conference call with analysts Thursday morning.
Mr. LaGuarta attributed the decline in unemployment rates in the United States and around the world to the fact that consumers continue to buy Pepsi products. Data released last week showed the US labor market slowing but still solid.
Inflation data released on Wednesday showed that US consumer prices, including food items, rose at a slower rate, although still far from the Fed’s target. Overall, food prices rose 5.7 percent in the year through June.
PepsiCo shares rose about 1 percent on Thursday. The food and beverage giant is one of the first companies to report its earnings each quarter, acting as a teller of how other companies are doing. Companies in the S&P 500 are expected to post earnings declines of 7 percent in the second quarter, according to estimates compiled by FactSet.
Coca-Cola and Nestlé will report earnings later this month. Many major banks will announce their results on Friday.