PepsiCo CFO Says No "Sign Of Consumer Slowdown" In US

Snack and beverage giant PepsiCo Inc. (PEP) CFO Hugh Johnston says the company does not see any signs of consumer slowdown.

"In the United States right now, we don't see any sign of a consumer slowdown," Johnston said on CNBC's Squawk on the Street.

Johnston says relatively neutral gas prices year over year is a "particularly positive" sign for consumer spending. "When that's the case, consumers generally feel better about themselves," he said.

Consumer spending in April and May increased, according to the Commerce Department. But, consumer confidence last month dropped to its lowest level in nearly two years.

Meanwhile, PepsiCo reported a 12 percent increase in the second quarter, reflecting improved revenues. Both adjusted earnings and revenues trumped estimates. Johnston said to CNBC that the company's reinvestment is driving its success.

"I think a couple of things are driving it. Number one we are investing back into the business in the form of advertising and marketing behind our brand, and in the form of selling capacity, to ensure we get good execution out in the marketplace. And as a result, we are seeing very quick responsiveness. What I think is just as important though, is that we are not just investing to grow faster now but we are investing to be stronger over time, whether that's in manufacturing capacity or digital capability. So we really feel like this is a sustained higher level of growth, not just a higher level of growth for the moment," he said.

Moving ahead, the company reaffirmed its fiscal 2019 outlook. Pepsi expects organic revenue to grow by 4% and adjusted earnings to decline by 1%.

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