PepsiCo Competed Against Itself Last Quarter
PepsiCo's (NYSE: PEP) shareholders know well the company's mission to transition its beverage portfolio to one that's less reliant on sweetened carbonated beverages and more attuned to current customer tastes. But executing this strategy provides an ongoing challenge, and the organization's fiscal third-quarter 2017 earnings report, released last week, demonstrated this complexity. PepsiCo reported disappointing numbers in its North America Beverages (NAB) operating segment, a result of inadvertently pitting brands against each other in a manner which proved detrimental to the company's top line.
While major segments such as Frito-Lay North America (FLNA) prospered last quarter, NAB slumped against basic benchmarks. Volume declined 6%, reported revenue dropped 3%, and organic revenue contracted by 5%.
NAB has booked flat or slightly positive results over the last several quarters, as gains in its still (noncarbonated) portfolio have offset weak soda volumes, so the pronounced negative results raised eyebrows. In the third quarter, management pointed to three specific culprits for the dip in volume and revenue:
Source: Fool.com
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