Pepsico issues full-year profit warning as it ramps up spending
Pepsico has forecast a drop in full-year profit after spending heavily on marketing and the development of new products as it vies to steal market share from rival Coca-Cola.
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The cola company has increased advertising for its products, which include Pepsi, Diet Pepsi and Mountain Dew, and has been pushing its new snack business.
This investment in advertising and new products is producing strong growth across the brand's core products though, according to chief financial officer, Hugh Johnston.
“(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," he told Reuters.
Analysts had expected the company's share price to rise by 3.5 per cent to $5.86 but Pepsi has confirmed it expects 2019 adjusted profit per share to drop 3 per cent instead, to $5.50.
The forecast also takes into account a higher tax bill and a two percentage point hit from a stronger dollar.
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Pepsi’s shares were up one per cent in early trading on Friday.