Snacks sales up for PepsiCo, Mondelez, yet both withdraw forecast citing pandemic

PepsiCo has reported a rise in first-quarter revenue, thanks to a surge in demand for Lays and Doritos. Mondelez International has also said it saw a significant increase in demand in March for its snacks.

Yet, both firms withdrew their full-year forecasts citing uncertainty around the globe due to the COVID-19 pandemic.

PepsiCo’s net revenue rose 7.7 percent to $13.9 billion (£11.11 billion) in the quarter ended March 21. Net income attributable to the company fell to $1.34 billion, from $1.41 billion a year earlier.

The company warned that uplift in the sales of snacks, oatmeal and pancakes would only partially offset a hit to business in the second quarter.

As the drinks business is not faring well under restrictions to limit the spread of the novel coronavirus, the company scrapped its full year forecast and predicted second-quarter organic sales would decline at a low single digit rate.

PepsiCo had previously forecast full-year organic revenue growth of 4 percent and an increase in core constant currency earnings per share of 7 percent.

The warning mirrored that of rival Coca-Cola Co, last week, which said volumes had fallen 25 percent globally since the beginning of April, largely stemming from a loss of sales other than at retail stores.

PepsiCo finance chief Hugh Johnston stressed the group was less exposed than Coca-Cola to the part of the market hit the hardest by the lockdowns.

“Compared to our biggest competitor in beverages, they clearly have higher market share in away from home channels- restaurants, movie theaters and the like,” Johnston told Reuters.

Still, demand for sodas at grocery stores is also starting to taper off after an initial phase of stockpiling at the beginning of the health crisis, Johnston said.

Cadbury and Oreo maker Mondelez International saw its revenue jumping to $6.71 billion in the first quarter ended March 31 from $6.54 billion a year ago.

The company has been able to offset weakness in emerging markets, thanks to strong demand for snacks in developed markets, particularly in North America where it has generated about 15 percent increase in sales.