PURCHASE, N.Y. — The snack giant PepsiCo saw a significant boost in consumer demand during the first quarter after implementing strategic price reductions and launching new product lines.
The company reported Thursday that first-quarter revenue climbed 8.5% to reach $19.44 billion for the January through March period, compared to the same timeframe last year. The Purchase, New York-based corporation exceeded analyst expectations of $18.95 billion, according to FactSet polling data.
The beverage and snack manufacturer started reducing costs on budget-friendly brands including Chester’s and Santitas during spring of last year, aiming to regain customers frustrated by consecutive years of rising prices. Following pressure from Elliott Investment Management, an activist investment firm, PepsiCo committed to speeding up these cost reductions.
In February, timed with Super Bowl marketing, the company announced price decreases of up to 15% on major chip brands including Lay’s, Doritos, Cheetos and Tostitos. A Michigan Walmart location demonstrated this strategy Thursday, displaying a 9.25-ounce Doritos package with a rollback price of $3.97, reduced from the previous $4.48.
The corporation also highlighted that innovative products are drawing shoppers, including Cheetos NKD and Doritos NKD varieties featuring no artificial additives, plus enhanced snacks such as Smartfood FiberPop and Doritos Protein.
Quarterly net earnings increased 27% to $2.33 billion. When accounting for one-time adjustments, per-share earnings reached $1.61, surpassing Wall Street’s projected $1.54 per share.
PepsiCo stock showed no movement in pre-market trading sessions.
