PURCHASE, NY. — Americans continued to eat at home often in the third quarter of the fiscal year, which was good news for Quaker Foods North America, a business of Purchase-based PepsiCo, Inc.
Operating profiting within QFNA jumped 15% to $145 million in the quarter ended Sept. 5. Net revenue increased 6% to $608 million. Volume was up 4%. Double-digit growth in rice/pasta and light snacks drove volume growth. Pancake mixes and syrup sales increased at a high-single-digit rate. Both hot and ready-to-eat cereal also delivered growth.
“I think there’s going to be more cooking and eating occasions at home going forward,” said Ramon L. Laguarta, chief executive officer of PepsiCo, in an Oct. 1 earnings call with analysts. “And especially, we think that breakfast, there will be at least one or two more occasions at home every week because I don’t think we’re going to go back to work in the same way that we used to.”
He added, “I think it’s going to be a much more flexible environment, a much more tech-enabled remote kind of work where consumers will be at home a few days of the week.”
Frito-Lay North America, another business of PepsiCo, in the quarter posted operating profit of $1.35 billion, a 5% increase from the previous year’s third quarter. Net revenue rose 7% to $4.40 billion. Volume increased 3%.
“Frito-Lay sustained its strength with 6% organic revenue growth and gained market share in the macro snack category in the quarter,” Mr. Laguarta said in a pre-recorded discussion on Oct. 1. “These results were powered by strong net revenue growth across each of our billion-dollar brands, including double-digit growth for Tostitos, high-single-digit growth for Cheetos and mid-single-digit growth for Doritos and Ruffles.
“We also saw continued strength in the e-commerce and large-format channels while trends in the convenience and gas channel meaningfully improved versus the previous quarter.”
Companywide, PepsiCo posted net income of $2.29 billion, or $1.66 per share on the common stock, which was up 9% from $2.10 billion, or $1.50 per share, in the previous year’s third quarter. Net revenue grew 5.3% to $18.09 billion, up from $17.19 billion. PepsiCo issued full-year 2020 guidance of 4% organic revenue growth and about $5.50 in core earnings per share, which would compare with $5.53 per share in fiscal 2019.
PepsiCo companywide for the nine-month period ended Sept. 5 had net income of $5.28 billion, or $3.80 per share on the common stock, which was down 4.9% from $5.55 billion, or $3.96 per share, in the same time of the previous year. Nine-month net revenue of $47.92 million was up 3% from $46.52 million.