PepsiCo Inc. (NASDAQ:PEP)

The analysis of the quarterly financial data reveals several key trends in revenue, cost management, profitability, and expenses over the observed periods.

Revenue and Cost of Sales

Net revenue remained stable at 100% across all quarters, serving as the baseline for the following percentages. Cost of sales generally fluctuated between approximately 44% and 48% of net revenue. Notably, there are periods such as December 2020 and December 2024 where cost of sales peaked close to or above 47%, indicating increased production or procurement costs relative to revenue.

Gross Profit

Gross profit margins exhibited variability, largely inverse to the cost of sales pattern. Gross profit ranged from around 51.96% at its low point during December 2020 up to roughly 55.92% during September 2024. Despite fluctuations, gross profit consistently stayed above 50%, indicating efficient core operations. However, the period with the lowest margin at year-end 2020 suggests pressures on profitability at that time.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses largely ranged between about 36.5% and 44.3% of net revenue. A notable peak occurred in the December quarters across multiple years, especially December 2022 and December 2024 where SG&A expenses exceeded 43%, reflecting higher administrative or marketing costs in those periods. The lowest SG&A expense ratios appeared in mid-2022 to mid-2023, indicating potential efficiency improvements or cost controls during those quarters.

Special Items

The "Gain associated with the Juice Transaction" was significant only in some quarters around 2022, with a pronounced spike at 20.51% of net revenue in March 2022, sharply boosting operating profit that quarter. This gain was not recurring in other periods. Impairment of intangible assets appeared sporadically with negative impacts up to -6.72% of net revenue, especially in mid-2022 quarters and some subsequent periods, indicating occasional write-downs affecting profitability.

Operating Profit

Operating profit fluctuated substantially, influenced by both core operations and special one-time items. The peak operating profit of 32.51% in March 2022 coincided with the juice transaction gain, whereas troughs were observed near 2.91% in December 2022. Excluding special items, operating margins generally ranged between approximately 10% and 17%, exhibiting periodic volatility but overall maintaining positive profitability.

Other Income and Expenses

Other pension and retiree medical benefits income/expense contributed minor positive or negative impacts typically within ±0.6% of net revenue, showing mostly modest fluctuations without significant trend. Net interest expense and other financing costs largely decreased over time from around -2.09% in early 2020 to under -1.0% in recent periods, indicating improved debt management or lower interest burdens.

Income Before Taxes and Net Income

Income before taxes mirrored operating profit trends, peaking significantly at 31.86% in March 2022 largely due to special gains, and bottoming near 1.81% in December 2022. After taxes, net income showed consistent positive margins, ranging mostly between about 5% and 13%, with an exceptional peak of 26.38% in March 2022. Net income attributable to the company followed a similar pattern, underscoring solid profitability with some impact from unusual items in specific quarters.

Overall Observations

The data reveals a pattern of seasonal fluctuations, particularly with higher expenses and volatility near year-end quarters. Special transactions and impairments introduced considerable variability, notably lifting profitability in specific periods such as early 2022. Core operational metrics suggest generally stable cost controls and profitability despite these fluctuations. Interest expenses experienced gradual improvement, positively affecting net margins. The consistent positive net income levels affirm sustained earnings generation across the timeframe.