INTERNATIONAL - PepsiCo Inc forecast a surprise drop in full-year profit on Friday, as the snack and beverage company spent heavily on marketing and developing new products in a bid to claw back market share from Coca-Cola Co Inc.
The company has boosted advertising for its colas - Pepsi, Diet Pepsi and Mountain Dew - and is also investing heavily in its snacks business to offer products with new flavors, healthier preparation methods and attractive packaging.
The investments in advertising and innovation is driving strong growth for core products, Chief Financial Officer Hugh Johnston told Reuters.
“(This) has caused us to want to invest more money back into the businesses in 2019 and that is why our guidance has landed where it has.”
The company said it expects 2019 adjusted profit per share to drop 3 percent to $5.50, while analysts on average had expected a 3.5 percent rise to $5.86 per share, according to IBES data from Refinitiv.