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PepsiCo Expands Digital Footprint to Meet Consumers' Needs

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PepsiCo Inc. (PEP - Free Report) continues to be an innovator, bringing two online sites for consumers to shop during the coronavirus pandemic and beyond. As consumers turn to online portals for their food and beverage needs during the pandemic, the company has started PantryShop.com and Snacks.com, which offer all of PepsiCo’s beverage, snack and food assortments.

PantryShop.com will offer PepsiCo's pantry brands like Quaker, Gatorade, SunChips and Tropicana, within categories such as "Rise & Shine", "Snacking", and "Workout & Recovery." At Snacks.com consumers can buy all Frito-Lay products, including Lay's, Tostitos, Cheetos and Ruffles as well as dips, crackers, nuts and more.

The launch of the websites demonstrates the company’s commitment to e-commerce and digital investments, which forms a key part of its growth strategy. The sites were developed keeping the current scenario in mind, taking care of the consumers’ new normal of working and exercising at home, and homeschooling. Through the websites, which was conceptualized and made functional in less than 30 days, PepsiCo has leveraged its technology, insights, resources and inventory to quickly meet consumers' evolving needs.

Notably, the company’s first-quarter 2020 results reflected strength despite the coronavirus outbreak in most parts of the world by the middle of March. It primarily gained from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which helped maintain continued supplies amid the coronavirus pandemic.

The company’s revenues gained from strength in all of its businesses as well as robust pricing and volume. Notably, all segments witnessed organic and reported revenue growth in the first quarter. Reported revenues improved 14% in Europe, 9% in AMESA, 6% each in APAC and Latin America, and 7% each in PBNA, FLNA and QFNA segments. Meanwhile, organic revenues increased 14% each at AMESA and Europe, 8% at Latin America, 7% each at APAC, FLNA and QFNA, and 6% at the PBNAA segment.

Despite a strong first-quarter performance, PepsiCo expects unprecedented uncertainties across its geographies, retail channels and consumer behaviors due to the coronavirus outbreak. Consequently, the company withdrew the guidance for 2020. However, it expects to maintain a strong balance sheet, increased cash generation and ample liquidity to invest in its business and reward shareholders.

For 2020, the company plans to return $7.5 billion of cash to shareholders, comprising $5.5 billion of dividends and $2 billion of share repurchases.

 


Driven by the positives, shares of this Zacks Rank #3 (Hold) company have gained 5.7% in the past year against the industry’s decline of 8.1%.

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