PURCHASE, N.Y. — Higher commodity costs and increased advertising and marketing investments dragged operating profit down 2% within the PepsiCo Americas Foods unit of PepsiCo, Inc. in the year ended Dec. 29, 2012. At $5,400 million, operating profit for PepsiCo Americas Foods was down from $5,496 million in fiscal 2011. Net revenue in the division increased 4%, rising to $23,990 million from $23,134 million.
For the fourth quarter ended Dec. 29, operating profit within PepsiCo Americas Foods was $1,700 million, up 2% from $1,673 million, while revenues rose 3.5% to $7,631 million from $7,373 million.
Frito-Lay North America, the largest segment within PepsiCo Americas Foods, was the only unit to post an increase in operating profit during the year, rising 1% to $3,646 million from $3,621 million. Net revenue also was higher, climbing 2% to $13,574 million from $13,322 million.
Full-year operating profit at Quaker Foods North America fell to $695 million, down 13% from $797 million in fiscal 2011. Net revenue was down 1% at $2,636 million, which compared with $2,656 million a year ago.
Latin America Foods operating profit was $1,059 million in fiscal 2012, down 2% from $1,078 million in fiscal 2011. Net sales rose 9% to $7,780 million from $7,156 million.
Indra Nooyi, chairman and chief executive officer of PepsiCo, said in a Feb. 14 conference call with financial analysts that the company “stepped up” its game in innovation by bringing to market more balanced offerings, from line extensions that bring additional locations to existing products and to new product platforms that are truly transformational.
“I am particularly pleased with both the number and breadth of our new product platforms, as these typically have higher, greater staying power and offer the opportunity for consistent growth over a number of years,” Ms. Nooyi said.
As examples, she pointed to the success of Quaker Real Medleys, an oatmeal with fruit and nuts that was recently recognized as a “Breakfast Product of the Year” for 2012, and Doritos Locos Tacos, which sold more than 325 million shells, contributing to the most successful product launch in Taco Bell’s 50-year history and ultimately expanding PepsiCo’s presence in the food service channel. Another product, Quaker Yogurt Bars, was launched originally in Canada, but through a “lift-and-shift” strategy it has been introduced in the United States, driving PepsiCo’s recent U.S. share gain in bars, Ms. Nooyi said.Overall, net income at PepsiCo, Inc. in the fiscal year ended Dec. 29 totaled $6,178 million, equal to $3.92 per share on the common stock, down 3% from $6,443 million, or $4.03 per share, in fiscal 2011. Net revenue was $65,492 million, down 1.5% from $66,504 million. For the fourth quarter, net income was $1,661 million, or $1.06 per share, up 17% from $1,415 million, or 89c per share, in the same period a year ago. Net revenue was $19,954 million, down 1% from $20,158 million.