PepsiCo ($PEP) had a great Q1 earnings call this morning, beating Wall Street's expectations by posting $1.07 per share on an increase in revenue. The other main point brought up in Pepsi's report is that a tremendous amount of their profits will be spent on stock buybacks.
"Despite a strong first quarter, there is still a great deal of uncertainty that exists in relation to COVID-19, including how geographies, retail channels, and consumer behaviors will evolve over time," said Ramon Laguarta, as he enters his second full-year of being the CEO of Pepsi.
"Due to this uncertainty, the company's previous financial outlook regarding the fiscal year 2020 is no longer applicable. However, with a strong balance sheet, highly cash generative business, and ample liquidity, we believe we have adequate flexibility to meet the needs of our business and return cash to shareholders."
What the earnings call didn't highlight was the sluggish rate of its hiring, which is something that will mostly affect Q2 and Q3, since it only started going down at the beginning of March.
From March 1st until today, Pepsi has cut job listings by 41%, which is a common occurrence right now. Companies everywhere are simply putting a hold on hiring, until either the economy or the pandemic can be figured out in a way that guarantees stability going forward. We highly doubt anything will be figured out by the summer, so we expect a smaller PepsiCo this year.
A year ago from today, Q2 2019, Pepsi was looking for nearly 60K workers for its "engineering, manufacturing, and utilities" division. As Q2 2020 begins, that number has dropped beneath 40K.
The total headcount for Pepsi went up 3% since January, and we don't imagine it will grow all that much. In fact, it might level off or go down, depending on how much demand there is for Pepsi products in a world where people stop going to restaurants. Will that affect Pepsi in the long term, or are there enough people willing to go out and get the new flavor of Mountain Dew?
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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