CHICAGO, Oct. 23, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Consumer Staples, including PepsiCo (NYSE:PEP-Free Report), General Mills, Inc (NYSE:GIS-Free Report) and Philip Morris International Inc (NYSE:PM-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Industry: Consumer Staples
Link: http://www.zacks.com/commentary/29554/Consumer-Staples-Stock-Outlook---Oct-2013
Besides costs saving initiatives, many consumer staples companies are shifting their focus to emerging markets to boost sales. With market saturation, low disposable income of consumers, uncertain macroeconomic conditions and increased competitive activity in developed markets, these companies are diverting their resources to explore emerging markets.
Relative to the mature North American and European markets, emerging markets such as Brazil, India, China, Mexico, Russia and Southeast Asia are to a large untapped opportunities where consumer spending is still growing. Additionally, demand for convenient and branded packaged food tends to grow as middle-class consumers shift to urban living. Thus the rising pool of middle class consumers in emerging markets represents a huge opportunity for the companies.
However, increased exposure to emerging markets also brings along the negative impact of currency fluctuations for many consumer staples companies. A stronger dollar reduces the value of outside-U.S. sales and in turn limits growth. But with improving standards of living in developing countries, the companies are now focusing on increasing pricing to derive profits, which was difficult earlier.
PepsiCo (NYSE:PEP-Free Report) is expanding in nations like Russia, Mexico, Canada and the United Kingdom and also in the emerging markets of China, India, Brazil and Africa by offering locally relevant innovation and value-added products. The company has tripled its revenues from the emerging and developing markets in the past five years. Going forward, management expects two-third of its revenues to come from the emerging markets.
Cereal maker General Mills, Inc (NYSE:GIS-Free Report) is also focusing on expansion in China, Brazil, India and Russia, where consumer spending is on the rise.
Tobacco company Philip Morris International Inc (NYSE:PM-Free Report) has a significant presence in a large number of markets. Asia remains a growth engine for the company. It also enjoys robust growth in Indonesia, Pakistan, China, Philippines, Mexico and Korea.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on PEP - FREE
Get the full Report on GIS - FREE
Get the full Report on PM - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article