PepsiCo tops estimates as marketing investment pays off

PepsiCo posted a third-quarter net income of $2.1bn, or $1.49p per share, down from the $2.5bn it reported a year earlier as the company's recent strategy of investing into marketing and advertising took its tole on its bottom line.

However, net sales rose 4.3% to $17.19bn, topping expectations of $16.93bn. Its North American beverage business and Frito Lay North America, which includes brands like Cheetos and Doritos, saw revenue growth of 3.5% and 5.5%, respectively.

Bubly, which PepsiCo hopes will be its next billion-dollar brand, also continued to gain market share in the flavoured sparkling water category.

Organic revenues grew 4.3% during the quarter.

Following the strong quarter, PepsiCo reaffirmed its earnings guidance for the full year, stating it expects adjusted earnings per share, assuming constant foreign currency exchange rates, to decline by just 1%.

Chief executive Ramon Laguarta said: "Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%."

As of 1355 BST, PepsiCo shares fizzed 2.16% higher in pre-market trading to $136.83 each.