PepsiCo (PEP) shares moved higher Tuesday following a Wall Street Journal report that suggested the drinks and snacks giant is preparing to lay off hundreds of workers in its north American division.
PepsiCo, which lifted its full-year profit forecasts in October following a stronger-than-expected third quarter earnings report powered by its Frito-Lay snacks operations, is looking to "simplify the organization so we can operate more efficiently", according to a company memo viewed by the Journal.
The job cuts are likely to affect the group's headquarters in Purchase, New York, as well as offices in Chicago, Illinois and Plano, Texas. Collectively, PepsiCo employs around 130,000 people in north America, with a total global workforce of just under 310,000.
U.S. corporate jobs cuts surged last month to just under 77,000, according to data from Challenger, Gray & Christmas, a more than four-fold increase from the same period last year, taking the 2022 total around around 320,000.
PepsiCo shares were marked 0.13% higher in pre-market trading to indicate an opening bell price of $183.35 each.
PepsiCo forecast organic revenue growth of around 12%, topping its previous forecast of 10%, while boosting its forecast for core earnings for the year to $6.67 per share, a four cent improvement on its previous estimate from early October.
PepsiCo posted core earnings for the three months ending in September of $1.97 per share, up 10.05% from the same period last year and 13 cents ahead of the Street consensus forecast. Overall group revenues, PepsiCo said, rose 8.3% to $21.97 billion, again topping analysts forecasts of a $20.8 billion tally.
North American revenues at Frito Lay, its snacks division, came in at $5.563 billion, up nearly 20% from last year -- even amid a 2% decline in overall volumes -- while beverages revenues were up 3.6% at $6.635 billion.
