PURCHASE, NY. — Ramon Laguarta, chief executive officer of PepsiCo., Inc., said he has noticed the private label sales growth in the snacks category, but sales for Frito-Lay North America, a business of PepsiCo, are increasing as well.
“Frito-Lay is, I think it’s growing share of market at the fastest pace that we’ve seen in the last maybe 10 years, if I recall, as a consequence of the great work the team is doing in terms of execution, but mostly innovation and brand building,” he said in an April 25 earnings call to discuss first-quarter results. “So I think we see both private label increasing, although from a very low base in salty snacks, but most importantly for us, we’re seeing our brands continue to gain loyalty, expand their consumer base and be preferred in that segment.”
Bryan D. Spillane, a research analyst for Bank of America Securities, added FLNA has brands such as Santitas and Chester’s that match up with private label/value brands in salty snacks.
Revenue at Frito-Lay North America in the quarter ended March 25 rose 15% to $5.58 billion from $4.84 billion. Organic revenue increased 16%. Frito-Lay’s core operating profit increased 24%. Brands such as Lay’s, Doritos, Cheetos and Ruffles rang up revenue growth in double-digit percentages as did smaller emerging brands such as PopCorners, Smartfood and SunChips. Sales growth for Tostitos was in the high single-digit percentages.
“We’re really building a portfolio of brands that covers different cohorts and different need stays in a unique way,” Mr. Laguarta said, mentioning the popularity of multipacks and the introduction of Frito-Lay Minis, which are bite-size versions of Doritos, Cheetos and Sun Chips snacks packed in easy-to-pour cannisters.
In Quaker Foods North America, revenue of $777 million was up 9% from $713 million. Organic revenue rose 10%. Net revenue growth of double-digit percentages came in oatmeal, light snacks, snack bars, grits and cookie categories. Quaker gained share in the pancake mix, pancake syrup, grits, rice, pasta and light snack categories.
Net income attributable to Purchase-based PepsiCo overall was $1.93 billion, or $1.40 per share on the common stock, which was down from $4.26 billion, or $3.06 per share, in the previous year’s first quarter. Results in the previous year’s first quarter included a gain of $3.3 billion associated with the divestiture of certain juice brands in North America and Europe. Net revenue increased 10% to $17.85 billion from $16.20 billion.PepsiCo executives now expect fiscal-year organic revenue to increase 8%, up from a previous guidance of 6%, and earnings per share in core constant currency to increase 9%, up from a previous guidance of 8%.