US soft drink and snack maker PepsiCo has raised its profit and sales forecast for this year, helped by strong results in the first quarter.
Although food prices are getting increasingly expensive, demand hardly decreased, according to PepsiCo. As a result, the company could compensate for the rising costs with price increases. On average, products such as Pepsi, 7Up, Lay’s chips and Quaker granola became 16 percent more expensive in the past quarter.
“We don’t expect commodity prices to fall for us, but the inflation rate will slow down somewhat during the year,” finance director Hugh Johnston told Reuters news agency.
Large food companies have been raising their prices for some time to absorb the sky-high costs. As a result, they face higher costs for wages, aluminium for cans, raw materials for food, and energy in transport, among other things.
PepsiCo now expects sales to grow 8 percent through 2023. The company previously assumed growth of 6 percent. As a result, earnings per share are expected to be $7.27. That’s 7 cents more than the company had previously assumed.
In the first quarter, PepsiCo posted earnings per share of $1.50, above market analysts’ expectations. In addition, sales climbed 10 percent to $17.9 billion. This is also above expectations.