PURCHASE, N.Y. — Operating income in the Frito-Lay North America (F.L.N.A.) unit of PepsiCo, Inc. was flat in the first quarter of fiscal 2018, while profit in the Quaker Foods North America (Q.F.N.A.) unit slipped 5%.
Operating profit at F.L.N.A. in the first quarter ended March 24 totaled $1,050 million, unchanged from the same period a year ago. Sales in the segment increased 3% to $3,617 million from $3,499 million.
“We had solid performance, with balanced volume growth and net price utilization and continued strong market share results, driven by great market base execution, innovation and creative brand marketing,” Indra K. Nooyi, chief executive officer, said during an April 26 conference call with analysts. “For example, building on the success of our 2017 launch of Lay’s Poppables, an entirely new growth platform for Frito, we extended the Poppables product lineup with the introduction of new Lay’s Poppables Honey BBQ and a new 12-count multipack of Poppables Sea Salt.
“We continue to drive net revenue growth through increased trial and household penetration, which, when combined with increased purchase frequency from the expanded product lineup and year-long media support, should continue to scale up this promising new brand extension.
“We have also extended the success of our Simply subline by introducing new package varieties with the Simply variety pack and a three-flavor lineup of single-serve packages for Simply Lay’s, Cheetos and Doritos offerings. The expanded package variety is enabling us to more fully capitalize on consumers’ growing desire for organic, non-G.M.O. snacks with no artificial ingredients.”
Ms. Nooyi said PepsiCo continues to demonstrate its commitment to “lifting and shifting” ideas around the world. The company recently introduced Red Rock Deli chips to select markets in the United States. Red Rock Deli has been “a breakout success” in Australia that Ms. Nooyi said addresses millennials' desire for high-quality food offerings, with credentials like Non-GMO Project certification and no artificial flavors or colors.
Meanwhile, operating profit at Q.F.N.A. fell 5% to $155 million from $163 million, while sales inched up narrowly to $601 million from $598 million.
“Our portfolio of Quaker-branded products had mid-single-digit retail sales growth, boosted by the continued success of Overnight Oats and supported by a new ad campaign highlighting the functional benefits of oatmeal,” Ms. Nooyi said.
From a total company perspective, PepsiCo, Inc., reported positive first-quarter results. Net income and sales both were up despite inflationary pressures. But overshadowing the news was the performance of the company’s North America Beverage business, which is still struggling.Net income for the quarter ended March 24 rose 2% to $1,353 million, equal to 94c per share on the common stock, compared with the same period of the previous year. Sales for the quarter rose 4% to $12,562 million.