PepsiCo talks about Generation Z, healthier products, and Celsius on its earnings call

PepsiCo (NASDAQ:PEP) turned higher on Tuesday after posting a better-than-feared Q3 earnings report and guidance update.

Of note, PepsiCo (PEP) management still expects to grow EPS at least 8%. Jefferies analyst Kaumil Gajrawala called that update impressive given the 12% EPS growth last year. “A proof point that the operating model can deliver in a tougher macro,” noted Gajrawala.

On the earnings conference call (transcript), the company was positive on the long-term growth potential of the snacking patterns of Generation Z that it will work in its favor. CEO Ramon Laguarta also highlighted the company’s focus on evolving the portfolio toward more health and wellness. The recent Siete Foods acquisition is expected to help in that area, as well as with the multicultural part of the business. PepsiCo (PEP) management was also asked about current trends with Celsius Holdings (CELH). CEO Ramon Laguarta said the company thinks the energy needs of consumers in the U.S. and everyone in the world will continue for the foreseeable future. He also sounded positive about the partnership in general.

“We like the partnership. We are delivering on our part of the partnership, our distribution points are going up, our service levels keep going up, so we’re executing our part of the partnership with discipline and high standards, and we remain optimistic about the partnership.”

Shares of PepsiCo (PEP) were up 1.25% at 1:40 p.m. Celsius Holdings (CELH) was down 0.35%.