PepsiCo stock climbed more than 1% in premarket trading on Tuesday following the food and beverage giant’s second-quarter profits and revenue that surpassed analyst expectations.
Pepsico (ticker: PEP) announced core earnings per share for the quarter ended June 11 stood at $1.86, above the FactSet consensus estimate of $1.74.
Revenue gained by 5.2% to $20.23 billion. Analysts surveyed by FactSet estimated that revenue would be $19.51 billion. Shares in PepsiCo gained 1.6% to $173.24 ahead of market open. Pepsi stock has dropped 1.9% so far this year, while the S&P 500 (ticker: SPX) has dropped 19%. That stellar performance has come at a time when investors, worried about consumer spending because of the high inflation and the potential for a recession, have grown to favour so-called haven stocks such as consumer staples.
PepsiCo announced that it now expects to deliver fiscal 2022 revenue growth of 10% compared to its previous guidance of 8%. The company also confirmed its 2022 adjusted EPS outlook of $6.63, which contrasts with the FactSet consensus of $6.64.
Pepsi’s results could possibly offer clues about other consumer stocks, many of which have already outperformed the larger market. The Consumer Staples Select Sector SPDR exchange-traded fund (ticker: XLP) is down by 5.5% this year. Coca-Cola (ticker: KO) has gained by 6.4% partly due to the global reopening since the brand registers more sales away from home.