PepsiCo reports strong Q1 performance as Deliveroo’s orders more than double

US – US beverage and snack company PepsiCo has reported strong Q1 results with organic net revenues jumping 2.4% and first-quarter net revenues jumping 6.8% to US$14.82 billion.

Pepsico’s impressive Q1 performance mainly benefited from accelerated return of the foodservice channel and the acquisitions of Chinese snack company Be & Cheery and South Africa’s Pioneer Foods.

This acquisition’s impact could also be reflected in the company’s operating profit stood which jumped 20% to US$2.31 billion, up from US$1.92 billion last year.

Division wise, PepsiCo’s Frito-Lay North America unit delivered 3% organic revenue growth at $4.24 billion, thanks to consumer-centric innovations such as Doritos 3D Crunch and Cheetos Crunch Pop Mix while the company’s Quaker Foods America unit reported revenues of US$646 million, a 1% rise compared to last year.

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PepsiCo Beverages North America sales went up 2% to US$5.07 billion with the company reporting strong performance by its Gatorade sports drinks which offset declines experienced in its carbonated soft drinks and water portfolio.

PepsiCo however expects its biggest unit to perform well in the next quarter driven by innovation plans and expanded presence in the energy category.

“As we look ahead, we expect our organic revenue growth to accelerate in the second quarter and have greater confidence in delivering our financial guidance for the full year,” said Ramon Laguarta, PepsiCo chairman and CEO, and Hugh Johnston, PepsiCo vice chairman and CFO.

Laguarta bets this continued growth on an assumption that vaccination efforts will accelerate, enabling the return of the foodservice channel which accounts for much of its business.

In Africa, the Middle East and South Asia’s organic revenue went down 1% and Europe’s was unchanged from the prior. The company’s Latin America business, on the other hand, reported a 3% rise in revenues, while its Asia Pacific, Australia and New Zealand, and China Region segment jumped by 18% due to strong snack sales.

Following its first quarter results, PepsiCo says it has greater confidence in delivering its financial guidance for the full-year: mid-single-digit organic revenue growth.

Deliveroo’s orders more than doubled in first quarter

UK grocery delivery platform Deliveroo also reported a strong quarter, with group orders growing 114% year-on-year to 71 million and gross transaction value (GTV) appreciating 130% year-on-year to 1.65 billion pounds ($2.27 billion).

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Chief Executive Will Shu said demand was strong in both UK and Ireland and its international markets, driven by record new customer growth and sustained demand from existing customers.

Deliveroo’s fortunes could be attributed to the strict lockdown measures implemented in the UK to curb the spread of the corona virus.

As people got restricted to their homes, they pretty had no other option but to order food online, and thus the surge in orders for Deliveroo.

In its statement, the UK-based delivery company recognised this fact saying that it was difficult to know how much of the growth was driven by the lack of opportunity to eat out in cafes and restaurants in COVID-19 lockdowns.

The company further noted that it expected the rate of growth to slow as restrictions eased and more people allowed venturing out and dining in restaurants.

“This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of COVID-19 restrictions,” Shu said.

“So while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full year guidance.”

The company said it was maintaining its guidance for full-year GTV growth of between 30% to 40% and gross profit margins of 7.5-8.0%.

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