PepsiCo, Inc. (PEP) Bundle
A Brief History of PepsiCo, Inc.
Company Overview
PepsiCo, Inc. is a global food and beverage leader known for its diverse product offerings, including brands such as Pepsi, Mountain Dew, Lay's, Gatorade, Tropicana, and Quaker. As of 2024, the company operates in more than 200 countries and territories around the world.
Financial Performance
For the 36 weeks ended September 7, 2024, PepsiCo reported:
| Metric | Amount (in millions) |
|---|---|
| Net Income | $8,092 |
| Net Income Attributable to PepsiCo | $8,055 |
| Net Income Per Share (Diluted) | $5.84 |
| Total Revenue | $35,507 |
| Operating Profit | $10,637 |
Recent Developments
PepsiCo has focused on sustainability and innovation in its product lines, with initiatives aimed at reducing plastic waste and improving nutritional value across its offerings. The company has also expanded its portfolio through acquisitions, including investments in health-focused brands.
Market Position
As of September 2024, PepsiCo's market capitalization is approximately $221 billion, making it one of the largest companies in the food and beverage sector.
Divisional Performance
For the 36 weeks ended September 7, 2024, the performance by division is as follows:
| Division | Net Revenue (in millions) | Operating Profit (in millions) |
|---|---|---|
| Frito-Lay North America (FLNA) | $19,112 | $4,015 |
| Quaker Foods North America (QFNA) | $2,530 | $198 |
| PepsiCo Beverages North America (PBNA) | $14,938 | $6,022 |
| Latin America (LatAm) | $5,246 | $1,022 |
| Europe | $5,139 | $1,276 |
| Asia, Middle East & North Africa (AMESA) | $3,650 | $652 |
| Asia Pacific (APAC) | $1,436 | $189 |
Debt Obligations
As of September 7, 2024, PepsiCo had the following debt obligations:
| Debt Type | Principal Amount (in millions) | Maturity Date | Interest Rate |
|---|---|---|---|
| Floating Rate | $300 | February 2027 | Variable |
| 4.650% Senior Notes | $550 | February 2027 | 4.650% |
| 4.550% Senior Notes | $450 | February 2029 | 4.550% |
| 4.700% Senior Notes | $450 | February 2034 | 4.700% |
| 4.500% Senior Notes | $850 | July 2029 | 4.500% |
| 4.800% Senior Notes | $650 | July 2034 | 4.800% |
| 5.250% Senior Notes | $750 | July 2054 | 5.250% |
Recent Corporate Actions
PepsiCo has entered into a new five-year unsecured revolving credit agreement allowing for borrowing up to $5 billion, expiring May 24, 2029. This agreement replaces a previous $4.2 billion credit facility.
Global Revenue Contribution
In the 36 weeks ended September 7, 2024, PepsiCo generated 43% of its consolidated net revenue from international markets, with significant contributions from Mexico, Canada, and the United Kingdom.
A Who Owns PepsiCo, Inc. (PEP)
Ownership Structure
As of 2024, PepsiCo, Inc. (PEP) has a diverse ownership structure primarily composed of institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder Type | Percentage of Ownership | Number of Shares Owned (millions) |
|---|---|---|
| Institutional Investors | 75.9% | 1,042 |
| Mutual Funds | 22.3% | 307 |
| Individual Shareholders | 1.8% | 25 |
| Company Executives and Directors | 0.5% | 7 |
Major Institutional Shareholders
The main institutional shareholders of PepsiCo include:
| Institution | Ownership (%) | Shares Owned (millions) |
|---|---|---|
| The Vanguard Group, Inc. | 8.0% | 112 |
| BlackRock, Inc. | 7.5% | 105 |
| State Street Corporation | 4.5% | 63 |
| Fidelity Investments | 3.1% | 43 |
| Capital Research Global Investors | 2.9% | 40 |
Shareholder Composition Over Time
The following table illustrates the changes in shareholder composition from 2022 to 2024:
| Year | Institutional Investors (%) | Mutual Funds (%) | Individual Shareholders (%) |
|---|---|---|---|
| 2022 | 73.5% | 23.0% | 3.5% |
| 2023 | 75.2% | 22.5% | 2.3% |
| 2024 | 75.9% | 22.3% | 1.8% |
Stock Performance and Dividends
PepsiCo has consistently performed well in the stock market, with a current stock price of approximately $175.00 per share as of September 2024. The company has maintained a strong dividend policy, declaring an annual dividend of $5.42 per share, reflecting a 7% increase from the previous year.
Recent Financial Highlights
For the third quarter ending September 7, 2024, PepsiCo reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Revenue | $23.32 billion |
| Net Income | $2.93 billion |
| Net Income per Share (Diluted) | $2.13 |
| Operating Margin | 16.6% |
| Tax Rate | 20.3% |
Conclusion on Ownership Trends
PepsiCo continues to attract a strong base of institutional investors, reflecting confidence in its financial stability and growth potential. The consistent increase in dividends and solid stock performance further supports its attractiveness as a long-term investment.
PepsiCo, Inc. (PEP) Mission Statement
PepsiCo, Inc. focuses on delivering sustainable growth through a diverse portfolio of brands that include beverages and convenient foods. As of 2024, the company emphasizes its commitment to performance with purpose, aiming to create a more sustainable food system and enhance the lives of consumers and communities globally.
Core Values
- Performance: Driving growth while creating value for stakeholders.
- Innovation: Continuously evolving products to meet consumer needs.
- Responsibility: Committing to sustainability and ethical practices.
- Collaboration: Partnering with stakeholders for mutual benefit.
Financial Overview
In the third quarter of 2024, PepsiCo reported significant financial data reflecting its operational performance. Below is a summary of the key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $23.3 billion | $23.5 billion | -0.6% |
| Operating Profit | $3.87 billion | $4.01 billion | -3.3% |
| Net Income | $2.93 billion | $3.09 billion | -5.4% |
| EPS (Diluted) | $2.13 | $2.24 | -4.9% |
| Dividends Paid | $5.37 billion | $4.94 billion | 8.7% |
Market Position
As of September 7, 2024, PepsiCo's market strategies have positioned it strongly within the competitive landscape. The company operates through various divisions, contributing to its extensive global reach:
| Division | Net Revenue (Q3 2024) | Net Revenue (Q3 2023) |
|---|---|---|
| PepsiCo Beverages North America | $7.18 billion | $7.16 billion |
| Frito-Lay North America | $5.89 billion | $5.95 billion |
| Quaker Foods North America | $648 million | $747 million |
| Latin America | $2.92 billion | $3.06 billion |
| Europe | $3.95 billion | $3.70 billion |
| APAC | $1.20 billion | $1.22 billion |
Sustainability Initiatives
In alignment with its mission, PepsiCo has set ambitious sustainability goals, including:
- Reducing greenhouse gas emissions: Targeting a 40% reduction by 2030.
- Water conservation: Aiming to replenish more water than it uses by 2030.
- Packaging goals: Committing to make all packaging recyclable, compostable, or biodegradable by 2025.
Conclusion
PepsiCo's mission statement and operational strategies reflect a commitment to sustainable growth and innovation. The company's financial performance and market positioning demonstrate its ability to adapt to changing consumer preferences while focusing on long-term sustainability.
How PepsiCo, Inc. (PEP) Works
Company Overview
PepsiCo, Inc. is a global leader in food and beverage, operating across various segments including Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Pepsi Beverages North America (PBNA), Latin America (LatAm), Europe, Africa, the Middle East, South Asia (AMESA), and Asia Pacific (APAC).
Financial Performance
As of September 7, 2024, PepsiCo reported the following financial metrics:
| Metric | 12 Weeks Ended 9/7/2024 | 12 Weeks Ended 9/9/2023 | Change (%) | 36 Weeks Ended 9/7/2024 | 36 Weeks Ended 9/9/2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Revenue | $23,319 million | $23,453 million | (1%) | $64,070 million | $63,621 million | 1% |
| Operating Profit | $3,872 million | $4,015 million | (4%) | $10,637 million | $10,303 million | 3% |
| Net Income | $2,930 million | $3,092 million | (5%) | $8,055 million | $7,772 million | 4% |
| Net Income per Share (Diluted) | $2.13 | $2.24 | (5%) | $5.84 | $5.62 | 4% |
Segment Performance
PepsiCo's operational segments showed varied performance metrics:
| Segment | Operating Profit (12 Weeks Ended 9/7/2024) | Operating Profit (36 Weeks Ended 9/7/2024) |
|---|---|---|
| FLNA | $1,523 million | $4,669 million |
| QFNA | $97 million | $133 million |
| PBNA | $914 million | $2,411 million |
| LatAm | $595 million | $1,717 million |
| Europe | $728 million | $1,550 million |
| AMESA | $197 million | $590 million |
| APAC | $262 million | $718 million |
Cash Flow and Capital Expenditures
In the 36 weeks ended September 7, 2024, PepsiCo reported:
| Cash Flow Item | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $6,220 |
| Capital Spending | $2,850 |
| Free Cash Flow | $3,547 |
Debt and Shareholder Returns
PepsiCo's debt obligations and shareholder returns include:
| Debt Issuance | Amount (in millions) |
|---|---|
| Long-term Debt Issued | $4,014 |
| Cash Dividends Paid | $5,369 |
| Share Repurchases | $760 |
Market Position and Trends
PepsiCo's market position is influenced by its diverse portfolio and strategic initiatives aimed at sustainability and health-conscious products. The company continues to adapt to changing consumer preferences while maintaining its competitive edge in the global market.
How PepsiCo, Inc. (PEP) Makes Money
Revenue Streams
PepsiCo generates revenue through two primary segments: Beverages and Convenient Foods. As of 2024, the breakdown of net revenue is as follows:
| Segment | 12 Weeks Ended 9/7/2024 (in millions) | 36 Weeks Ended 9/7/2024 (in millions) |
|---|---|---|
| Beverages | $10,368 | $28,386 |
| Convenient Foods | $12,951 | $35,684 |
| Total Net Revenue | $23,319 | $64,070 |
Operating Profit
For the 12 weeks ended September 7, 2024, PepsiCo reported an operating profit of $3,872 million, which reflects a decrease of 4% compared to the same period in 2023. The operating profit for the 36 weeks ended September 7, 2024, was $10,637 million, representing a 3% increase year-over-year.
Cost Structure
The cost of sales for the 12 weeks ended September 7, 2024, was $10,396 million, leading to a gross profit of $12,923 million. For the 36 weeks, the cost of sales was $28,563 million, resulting in a gross profit of $35,507 million.
Unit Volume Performance
In the latest quarter, unit volume declined by 1.5%, primarily driven by declines in key brands:
- Tostitos: High-single-digit decline
- Cheetos: Mid-single-digit decline
- Variety Packs: Low-single-digit decline
- Lay’s: Mid-single-digit growth
Regional Performance
PepsiCo's revenue by region for the 36 weeks ended September 7, 2024, is detailed below:
| Region | Net Revenue (in millions) |
|---|---|
| North America | $39,862 |
| Latin America | $8,027 |
| Europe | $9,397 |
| AMESA | $4,184 |
| APAC | $3,362 |
| Total Revenue | $64,070 |
Profitability Metrics
The operating margin for the 12 weeks ended September 7, 2024, was 16.6%, down from 17.1% in 2023. The operating margin for the 36 weeks was 16.6%, up from 16.2% the previous year.
Net Income
Net income attributable to PepsiCo for the 12 weeks ended September 7, 2024, was $2,930 million, a decline of 5% compared to $3,092 million in the same period in 2023. For the 36 weeks, net income was $8,055 million, an increase of 4% year-over-year.
Cash Flow and Investments
Net cash provided by operating activities for the 36 weeks ended September 7, 2024, was $6,220 million, compared to $7,630 million in the prior year. Capital expenditures during this period were $2,850 million.
Shareholder Returns
In 2024, PepsiCo announced a 7% increase in its annualized dividend to $5.42 per share. The company expects to return approximately $8.2 billion to shareholders, comprising dividends of about $7.2 billion and share repurchases of $1.0 billion.
Financial Challenges
PepsiCo faced challenges in the form of increased operating costs, particularly due to higher restructuring charges and commodity prices. The company recorded a pre-tax charge of $184 million associated with product recalls in its QFNA division.
Market Position
PepsiCo remains a leader in the global food and beverage market, with a significant market share across various segments. The company's diversified portfolio and global reach contribute to its revenue generation strategy.
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