PepsiCo, Inc. stock research
FY2023 Q2
PepsiCo (PEP) Gross Margin — Quarter Ended Jun 17, 2023
Revenue increased compared to both the prior quarter and the same quarter last year, driving a higher gross profit despite a higher cost of revenue. The gross margin improved relative to the year-ago quarter but weakened slightly from the prior quarter.
Gross margin takeaway
Quarter ended Jun 17, 2023 · FY2023 Q2
Revenue increased compared to both the prior quarter and the same quarter last year, driving a higher gross profit despite a higher cost of revenue. The gross margin improved relative to the year-ago quarter but weakened slightly from the prior quarter.
- The gross margin improved year-over-year as revenue grew faster than cost of revenue, but the sequential decline indicates that cost of revenue rose at a relatively faster pace from the prior quarter.
- Compared to the prior quarter, revenue and gross profit were higher, while gross margin was slightly lower. Compared to the same quarter last year, all three metrics were higher, with gross margin also improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
54.7%
Gross profit
$12.2B
Revenue
$22.3B
Cost of revenue
$10.1B
Quarter-over-quarter change
-0.6 pts
Year-over-year change
+1.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 25, 2023 | $17.8B | $9.9B | $8.0B | 55.2% |
| Jun 17, 2023 | $22.3B | $12.2B | $10.1B | 54.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 25, 2023
-0.6 pts
Year-over-year change
Jun 11, 2022
+1.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved year-over-year as revenue grew faster than cost of revenue, but the sequential decline indicates that cost of revenue rose at a relatively faster pace from the prior quarter.
Compared to the prior quarter, revenue and gross profit were higher, while gross margin was slightly lower. Compared to the same quarter last year, all three metrics were higher, with gross margin also improved.
Monitor the trend in the ratio of cost of revenue to revenue, as the sequential margin contraction suggests a shift in cost dynamics.