The 10-second takeaway
For the quarter ended June 16 (Q2), PepsiCo met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
PepsiCo booked revenue of $16.46 billion. The 12 analysts polled by S&P Capital IQ looked for net sales of $16.56 billion on the same basis. GAAP reported sales were 2.2% lower than the prior-year quarter's $16.83 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.12. The 16 earnings estimates compiled by S&P Capital IQ predicted $1.09 per share. GAAP EPS of $0.94 for Q2 were 20% lower than the prior-year quarter's $1.17 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 51.9%, 80 basis points worse than the prior-year quarter. Operating margin was 15.8%, 90 basis points worse than the prior-year quarter. Net margin was 9.0%, 220 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $17.18 billion. On the bottom line, the average EPS estimate is $1.17.
Next year's average estimate for revenue is $66.40 billion. The average EPS estimate is $4.09.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,407 members out of 4,553 rating the stock outperform, and 146 members rating it underperform. Among 1,272 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,242 give PepsiCo a green thumbs-up, and 30 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PepsiCo is outperform, with an average price target of $71.64.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.