PepsiCo reported better-than-expected sales in the fourth quarter after hiking prices for its drinks and snacks.
Revenue rose more than 10% to $28 billion. That was better than the $26.8 billion Wall Street had forecast, according to analysts polled by FactSet.
Pepsi raised prices in a number of markets as it continued to battle double-digit percentage cost increases for ingredients like cooking oil, potatoes and seasonings. Frito-Lay snacks and Quaker products booked double-digit revenue gains in North America even though sales volumes were down 1% and 3%, respectively.
In Europe, Pepsi said its costs for packaging materials, cooking oil and other commodities surged 141 percentage points. Revenue and sales volumes both fell in that market. Revenue and sales volumes rose elsewhere, including Asia and Latin America.
In prepared remarks, Pepsi Chairman and CEO Ramon Laguerta said consumers have been resilient despite higher prices, and continue to gravitate toward familiar brands like Doritos and Cheetos. But he said the company is "diligently monitoring spending patterns and behavior."
Pepsi's net income fell 60% to $535 million, largely due to a $1.5 billion tax impairment charge for its SodaStream brand and other assets. Without one-time items, Pepsi earned $1.67 per share in the October-December period, beating analysts' forecast of $1.65.
The Purchase, New York, company expects to deliver organic revenue growth of 6% this year, a slower pace from its full-year organic growth of 14.4% in 2022. It also plans $1 billion in share repurchases.
The company said it expects full-year adjusted earnings of $7.20 per share, up 6% from 2022. That came in lower than Wall Street's forecast of $7.27 per share, according to FactSet.
Pepsi also said it would buy back about $1 billion worth of its own shares and raised its annual dividend by 10%.
Pepsi shares rose more than 1% in pre-market trading.