Frito-Lay’s 2012 profit tops other Pepsi units
By KAREN ROBINSON-JACOBS
Plano-based Frito-Lay was the 2012 profit leader for parent company PepsiCo, the global snack and beverage company said Thursday.
Frito-Lay’s operating profit grew 3.5 percent to $1.11 billion in the quarter that ended Dec. 29 and gained 1 percent for the year, to $3.65 billion.
The yearly tally put it ahead of the company’s American beverage unit and operations abroad.
PepsiCo, based in Purchase, N.Y., reported profit of $1.66 billion, or $1.06 a share, up from $1.42 billion, or 89 cents a share, a year ago.
Excluding nonrecurring, noncomparable events, profit was $1.09 a share. Analysts were expecting $1.05.
Investors noticed, pushing PepsiCo’s stock up 1.1 percent to close at $72.28.
For the fourth quarter, Frito-Lay posted revenue of $4.1 billion. That represented about 21 percent of PepsiCo’s $19.95 billion quarterly tally, which was down 1 percent from the previous year.
Some of the Frito-Lay revenue came from Taco Bell, its former corporate cousin. Taco Bell, which was part of PepsiCo until 1997, is planning an expansion of its Doritos Locos taco line, which sold 325 million tacos since its launch last March.
The menu item, a traditional Taco Bell taco with a shell made out of Doritos, proved to be the most successful product launch in Taco Bell history, said executives with PepsiCo and Taco Bell’s parent company, Yum Brands.
Frito-Lay is looking to boost restaurant sales, which already represent a “meaningful portion of Frito-Lay’s revenue,” said Hugh Johnston, PepsiCo’s chief financial officer.
“We really do work hard with our food service customers to take our base brands … and to shape them for the particular type of offering they are creating,” he said, “in order to create excitement, in order to draw people into their restaurants.
“As they grow, we get to grow along with them. Doritos Locos Tacos is a great example, but I expect you’ll see lots more of those things.”
Follow Karen Robinson-Jacobs on Twitter at @krobijake.