PepsiCo releases Q1 report

PepsiCo Inc. highlighted organic revenue growth of 4.4 percent and core earnings per share of 83 cents in its first-quarter report this week.

“We are pleased with our performance for the first quarter of 2015. Our focus on innovation, brand-building, and marketplace execution, funded in part by our productivity initiatives, continues to drive strong, fundamental business performance,” PepsiCo Chairman and CEO Indra Nooyi said in a statement. “In the quarter, we generated 4.4 percent organic revenue growth and we once again expanded both gross and operating margins.”

The news was not all positive for the Purchase-based company. According to the report, net revenue declined 3 percent, reflecting the impact of adverse foreign exchange translation, which Nooyi addressed.

“However, foreign exchange translation and transaction headwinds persist. We have and will continue to take actions to manage through the current volatile macroeconomic environment by taking responsible pricing actions, tightly controlling costs, and optimizing our global sourcing to minimize and mitigate the impacts of the current foreign exchange challenges,” Nooyi said. “At the same time, we will not let cyclical macroeconomic issues divert us from our focus to drive sustainable shareholder value creation. We intend to continue to invest across our markets and brands to generate organic revenue growth, drive greater efficiency and productivity, deliver attractive free cash flow growth and cash return to shareholders, and enhance our returns on invested capital.”

Key points from the report’s 2015 outlook include:

• Reaffirms 7 percent core constant currency EPS growth target for 2015;
• Foreign exchange translation now expected to adversely impact core EPS by 11 percentage points; and
• On track to deliver approximately $1 billion productivity savings and $8.5 billion to $9 billion cash return to shareholders.