PepsiCo And Constellation Brands’ Results

PepsiCo And Constellation Brands’ Results

over 3 years ago2 mins

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Raise your glasses to drinks magnates PepsiCo and Constellation Brands, whose quarterly earnings updates were way better than expected on Thursday 🥃

What does this mean?

Pepsi earned more in revenue and profit than investors predicted thanks to a 4% rise in “organic” revenue growth – which disregards swings in currency values and the impact of acquisitions – versus the same time last year. Cheers to rising sales of both its drinks and its most popular snacks for that one.

Constellation – the company behind some of America’s favorite liquor brands – saw its quarterly revenue and profit beat investors’ expectations too 📈 Sales in bars and restaurants were knocked by ongoing disruptions, sure, but at-home sales more than made up for them. And of all the brands to really seize the moment, it was the unfortunately named Corona that saw its sales boosted by the launch of a hard seltzer line – one that might rival Molson Coors’ new tie-up with Coca-Cola.

Why should I care?

Both Pepsi and Constellation’s shares only got a modest boost on Thursday, potentially because investors were already more optimistic than analysts’ official projections 🤔 But Pepsi did try to give investor confidence a nudge: the company – which previously abandoned its annual earnings forecast – now reckons it’ll grow organic sales by 4% and turn in a higher profit than investors anticipated. Constellation, meanwhile, still thinks it’s too tough to call: the drinks firm opted against making an official forecast.

Source: Yahoo Finance
Source: Yahoo Finance

Consumer staples companies – which tend to see pretty predictable demand – were up 10% last quarter, beating US stocks’ 8% average. That narrow gap might reflect investors’ flip-flopping over the state of the pandemic: defensive stocks like staples tend to perform better when things look bleak, while their “cyclical” counterparts – whose earnings rise and fall with the economy – shine most when things are improving.

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