PepsiCo, Inc reported a 16% decline in profit for the third quarter of 2019 to $2.1bn, driven by increased spending on advertising as well as administrative expenses, which climbed by 8.59%.
The New York-based firm said that the increased ad spending did help boost sales by 4.26% to $17.1bn from $16.5bn.
Commenting on the results, PepsiCo’s Chief Financial Officer, Hugh Johnston said: “We’re seeing returns on the investment.”
However, the growth was not enough to lift earnings higher. The company noted that income tax provisions, which jumped 197% in the period, also weighed on the firm’s earnings.
Speaking on the results, PepsiCo CEO, Ramon Laguarta, said: “We are making good progress against our strategic priorities and our businesses are performing well as we continue to make the necessary investments in our capabilities, brands, manufacturing and go-to-market capacity to propel our future growth.”
PepsiCo had its Frito-Lay North America snack business to thank for the sales growth as it logged 5% growth from last year. Its North America Beverage business also fared well with a 3% lift, just as its Quaker Foods North America business grew by 2%.
The company’s performance in foreign markets was also impressive with Latin America, Europe Sub-Saharan Africa and Asia, Middle East and North Africa all recording positive growths of 2%, 6% and 5% respectively.
Looking forward to the rest of the year, the company said that given its performance year-to-date, it now expects to meet or exceed its full-year organic revenue growth target of 4%.
Read the full PepsiCo earnings release here.