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Pepsi Q2 Earnings Explained For 17-Year-Old Hedge Fund Managers
Earlier today, Pepsi did what few companies will do this quarter: beat both the top ($15.9BN, vs exp. $15.8BN) and the bottom line ($1.32, vs Exp. $1.24) without much use of every accounting gimmick under the sun (ahem Alcoa). The cherry on top: it also raised it earnings forecast for the year from 7% to 8%, pushing shares higher 2.2% in premarket trading.
What Pepsi did, unlike all other companies crushed by the soaring dollar, is that while the maker of Pepsi cola, Lay's potato chips and Gatorade was also hurt by weakening currencies, from the euro to the Brazilian real, Pepsi was able to push through price increases to keep revenue stable, while it continued to slash costs: in raising prices while firing people.
There is nothing wrong with that, Capitalism 101.
Solid results. What did catch our atention was Pepsi's brilliant dumbing down of its 10-Q and admission that it knows very well who its main "investor base" is these days, namely "attention-deficited", 17-year-old hedge fund managers (and algos of course), who need a simple, portable story on which to BTFD (or BTFATH).
Because when you know precisely who your New Normal target audience is, this is how you should always lay out your resuts:
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Can't wait for the Leroy Nieman Bond Report
Putney Swope at its best.
Is that the Ramadan labeling, or are they just embarrassed to put their name on the product?
Pepsi started the de-contenting craze 20 years ago, when a pound bag of chips went to 13 oz, then 11, then I think 10 or so. More air, less food.
OK, my critique on this (not that you asked):
1. Lots of color. Very good. Colors amuse me and keep my attention. I want to touch them.
2. Soda bottles and snack bags. Check. It's what they do which I didn't know before. Thank you for the information.
3. Words.... OK, this is a step backwards. More pictures would be better.
4. Numbers.... Grrrrrr. Numbers are racist. Please discontinue the use of numbers in future earnings reports. Even a bar graph would be pushing it.
5. And this one really freaks me out.... the numbers and words are being spoken BY THE SODA BOTTLES AND SNACK BAGS. See the speech bubbles coming out of them? It's a little weird. Like they're saying "If you don't believe these numbers from our Chairman, let the snacks tell you about it themselves! Take it away, snacks!"
Too many words. Reading is hard.
Innovation is bulls$&@!
Frito Lays off 1000's, Ruffles a few feathers....kids will understand that
PEPSI/SNAP/WIC earnings report.
".kids will understand that"
That's right, sell the fizz not the soda...
"Double-plus good".
On the positive side - they didn't set anyones hair on fire.
Yes, lots of good ideas there. One suggestion, maybe next year they could replace all those confusing numbers with smiley faces instead? It would add a nice ray of sunshine to their joy-joy report.
Missed the electrolytes. Brawndo has electrolytes.
" Lots of color. Very good. Colors amuse me and keep my attention. I want to touch them."
Needs more green and no red. We won't want the investors seeing any red, or they might draw the wrong conclusions! :)
This is part of the Common Core MBA program.
The class is right after the Single Windsor tie class.
http://how-to-tie-a-neck-tie.com/halfwindsor.htm
A man has got to know his limitations.
+1000
Common Core at work!!
"More air, less food."
Slackfill is delicious.
Huh? Pep-wha? Sorry, I was distracted by my phone...
They should have cited my Mountain Dew addiction as a major growth engine
Nah. It's savings from the removal of bromated oil.
It looks like selling solid, liquid and other forms of poison, especially with cells from the cord blood of aborted feotus's added as flavour enhancers is a good business to be in....
GO (to hell) Pepsqueak...
https://aadivaahan.wordpress.com/2011/05/09/population-control-vectors/
"No Shiiit"
They just need a few "THUD" "POW!!" BOOOOOM! and "ZINGS" and they could get a booth at Comic Con
Could it be the aborted fetal tissue they use for attraction flavors?
"Do you want to sell sugar-water for the rest of your life or make history"...
HFCS - Killing it!!
Great. I just read that acronym as "High Frequency Corn Syrup"
Thanks, Zerohedge.
We really have reached the sublime and ridiculous point...almost every morning, I think I'm waking up from a bad acid trip.
After you use your hoe you should clean it so it won't rust and will stay sharp.
Still missing the last panel with the cliff...
BAM! POW! BUY!
Waiting for them to come out with the Pepsi Super Heros. And the movie Pepsi Trader: Return on Investment.
BTFATH=??
Seriously...means buy the after hours? It means what?? Anyone? BTFATH=??
Buy The Fucking All Time High
Thanks, Dirk!
Which is ZH cynical shorthand for this old gem https://www.youtube.com/watch?v=0akBdQa55b4
Sounds like William Banzai & his impressive artistic skill have a new market segment to consider - Would love Goldman Sachs to hire WB to produce their performance layout!
Pepsi has a well known brand but it's hardly strong because the defination of a strong brand is twofold -
1) When there is NO alternative
2) Whwn you do their advertising for them
Take Apple as a good example. It's a very strong brand for lots of people. If they were to walk into a shop looking to buy an iPhone and they'd sold out and the sales assistant offers them a discount on a Blackbury, do you think they'll buy? Nope, hence strong brand. Plus, how many people have raved about their iCrap product to their friends, plenty, hence strong brand.
Now, imagine if you walk into a fast food joint and order a Pepsi and they say, don't sell it, we have Coke, what are you going to do? Plus, how many people have sold Pepsi to their friends because it's so great?
All of this 'brand' bullshit, don't confuse a well known brand for a strong one because if you give me $100m marketing budget I can make any 'brand' well known, but if it's shit, it will never be strong.
Nice comments C99. Pepsi's saving grace is China where people love their brands for whatever reason, which I think include Pizza Hut and KFC. Not as much as they love the iphone of course. And in reality the difference between the iphone and an android device is probably about the same as the difference between pepsi and coke.
I am going to do devil's advocate for the sake of the exercise.
Coke and Pepsi have little at stake. If I substitute and don't like it I have lost very little money and I will not be stuck with the drink I don't like for very long. I can throw it out, or drink the less tasty drink and be unhappy for 30-40 minutes tops.
A computer I have a lot at stake. If I substitute and don't like it, that is a lot of money and I will have to use the fucking thing a long time. I might or might not be able to get my money back and change it. There certainly will be a hassle. I have more to lose with the higher end product purchase.
Thus I don't buy this as the instance of a "well known brand" vs. a "strong brand." This is about where they are on the spectrum of "investment" vs. potential amount of time unhappy or even without the product you want.
You may be correct. This comparison does not sell me.
If America can do this well on sugar water with color, just imagine if we built cars, steel, computers, heavy machery. Think of how our middle class would soar. Think of the entry level job training it would provide.
Why we could build a solid middle class and all that prosperity would develop into a robust service sector .. IMAGINE THE POSSIBILITIES !!
Oh, that's right .. we used to do that .. but the politicians allowed their puppet masters to move the important stuff outside the country so they could appease the hedge fund masters.
Sorry middle class, didn't mean to get your hopes up.
Sorry college grads. I guess you'll be stuck in your parent's basement for a bit longer.
Inner city kids, resume your drug dealing.
LOL we can't compete with Asian slave labor more like.
Every once and a while, when I preach keeping jobs in America and building a solid country vs chasing profits, I enevitably get the once know-it-all clown who says, "you just don't get it, that's Capitalism 101"
To which I say, "if your family was starving, would you kill once of your kids to feed the rest, because that's Survival 101. But I don't want to live in a society that susbcribes to either."
Never do get a suitable 'come back' to that.
There is no way to compete with $3 per day labor without tariffs and other protection measures. Odd, it seems we spend trillions on military to 'protect' our interests bullying other nations, but, protecting our economy, our children's future from the greed of the internationalists that own world governments is called protectionism and is a big fat no no.
Protectionism is condemned from Kindergarten to University. While Academia teaches this to the younger generations who have indebted themselves hoping to get yobs that have shipped out long ago, the monies from their debt goes into the pockets of these same academics and their associated institutions.
Kind of sick if you ask me but then I'm not a PhD which probably explains it.
Kid's life isn't yours to sacrifice. That's not survival 101. That kid is another set of hands and eyes.
I am all for Capitalism 101.
In Capitalism 101 we say to the child that's grown, "Sorry kiddo, you are a grown man. Minimum is you must support yourself. But Mom, and Dad could sure use some help with the hunting and gathering." Then you let him decide.
To the kid that's not grown you say, "Kiddo, times are tough. We're cutting back. Don't leave a single scrap on the plate. You have eyes, ears, and hands too. I expect you to use them to help out as much as you can. Mom and Dad will set the example and make sure you have enough to get by on from our own plates."
The problem is that you get what you pay for.
I do not agree that US workers cannot compete with low-priced foreigners.
Why the hell not? If we have a level playing field.
IF WE HAVE A LEVEL PLAYING FIELD.
So don't tell me that you'll have Mr Foreign off the books, so you don't have to satisfy Uncle SAM, handicapping me, at the same time you have me paying Uncle SAM taxes to pay for Mr Foreign's welfare, handicapping me a second time.
If you are going to tell Uncle SAM to pound sand on Mr Foreign's behalf, then tell him the same on my behalf too.
If you don't I'll go use my superior intellect, superior education, and the superior motivation you've given me, to create superior destruction that will make the French's 18th Century 'Terror' look like child's play. Uncle SAM will be road-kill SAM. And you might join him.
Labor is only half of the equation. Cheap counterfeit capital is the other half.
Without the banksters' printing of fiat, control of interest rates, fixing of exchange rates, and the threat of violence, government, against those that disobey them, there could not exist a long term trade imbalance.
Liberty is a demand. Tyranny is submission..
The banksters' prosperity is actually our prosperity stolen.
and definitely cannot argue with the german robots.
BULLSHIT.
If you don't give preferential tax and regulatory treatement to the foreigner, we'll compete the hell out of them.
Have you seen the guys they are bringing in on H1B's for the IT jobs?
They are sacking the guys who invented IT, and giving their jobs to foreigners who passed the university equivalent of IT Boot Camps. The expertise isn't there, and it shows everytime you call the help desk.
You want to know the difference between the inventor of technologies and a University boot-camp bunny?
Tech gets old quick.
Boot camp bunny can't make any new tech, and can't trouble shoot it when it doesn't behave, because he doesn't know how it is put together, but just went to a professor's course on how to use it, with a little theory thrown in.
Think your programming boot camp bunnies will make any difference? They won't. If there is no GUI for it in the Development app they were taught, then they don't know how to do it.
And, oh, by the way, the development apps only stamp out copies of code that Mr Fired wrote from scratch, vulnerabilities and all.
Universities aren't training people to do the raw work ...only use the script-kiddie apps that pump out copies of work already done.
There's only so much you can patch before the whole application is swiss-cheese. Script kiddie doesn't understand how to make the components that go into a development app.
Microsoft programmers do great work. But they aren't the only ones. And the nature of MSFT's work has been to 'automate', and then to 'automate the automation'... and now we're to the point where you have to drag 45-65 year old-timer's out of retirement or from the supervisor's office to fix the lower level components because no one else knows how.
That is happening everywhere, because of the preference for foreigners in the workplace.
When you have to have those components and call me out of retirement to fix what Mr Foreign should have been maintaining...that foreigner isn't going to be cheap anymore.
Heh, 45 years makes one an old timer. After bashing ';'s for 30 years and watching every iteration of software management and customers become more and more lost in the sauce, it makes me sad. San Jose is the next Detroit.
https://goo.gl/AgTCFE - Bernie Sanders isn't going to save America
I knew a guy named Bernie Sanders. He was a taste tester for urinal cakes.
Nobody is going to save America. TPTB don't want that, and they own you.
Just don't invest in Pepsi because it uses High Fructose Corn Syrup that causes fatty liver and metabolic syndrome disease.
It also contains mercury that poisons the body in many ways that leads to infections and suppresses natural immunity. The diet version contains Aspertame that causes brain tumors, MS and Lymphoma.
In the post-collapse world, poisons like Pepsi and government-protected Big Pharma drugs, vaccines, fluoridated water and GMO foods will be universally rejected by the intelligent and adaptable survivors.
Poison delivery systems have no place in our future world.
They need a Pepsi jingle for a whole new generation :
"I'd like to buy the world a Pepsi..."
Won't you gentlemen have a Pepsi?
I suppose it's 10K will be a comic book starring Col. Sanders and Boy Pepsi fighting the minions of GAAP?