PURCHASE, NY (AP) — PepsiCo reported higher-than-expected revenue in the fourth quarter as higher prices and improved productivity offset continued weakness in North American demand for its snacks and drinks.
Revenue rose 5.6% to $29.3 billion in the October-December period. That was higher than the $28.9 billion Wall Street was expecting, according to analysts polled by FactSet.
Volumes for snacks like Doritos and Cheetos fell 1%, while North American beverage volumes dropped 4%, the Purchase, New York, company said Tuesday. Globally, beverage volumes rose 1% while food volumes fell 2%.
PepsiCo hiked prices by 4.5% globally during the quarter. Prices for PepsiCo beverages rose 7% in North America, while prices for the company’s snacks ticked up 1%.
But price cuts could be on the horizon. PepsiCo said in December it planned to cut prices and trim nearly 20% of its product offerings as part of a deal with activist investor Elliott Investment Management. The company has acknowledged that years of double-digit price increases and changing consumer preferences have weakened demand for its products.
Elliott, which took a $4 billion stake in PepsiCo in September, has been prodding the company’s board to make changes, saying PepsiCo was being hurt by slowing growth and lower profits in its North American food and beverage business.
PepsiCo said it also planned to accelerate the introduction of new offerings with simpler and more functional ingredients, including Doritos Protein and Simply NKD Cheetos and Doritos, which contain no artificial flavors or colors.
The company also recently introduced Pepsi Prebiotic, which it said sold out within 30 hours after its introduction on Black Friday. PepsiCo said the soda will soon be available across the U.S.
Adjusted for one-time items, PepsiCo earned $2.26 per share in the fourth quarter. That was also higher than analysts expected.
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