Shoppers are still willing to pay more for drinks and snacks, Pepsi says.

PepsiCo defied some expectations for an inflation-induced slowdown, elevating its income forecast for the yr for a second time, citing the “resilience” of shopper spending. However in its quarterly earnings report on Tuesday, PepsiCo left its revenue forecast unchanged, suggesting that buyers might in the reduction of as costs proceed to rise at an uncomfortably excessive fee.

The corporate, which makes Pepsi, Mountain Dew and Doritos, didn’t elevate its revenue outlook according to its income forecast due to uncertainties about “shopper elasticity,” Hugh F. Johnston, the corporate’s chief monetary officer, stated on a name with traders. In different phrases, buyers might finally purchase much less if costs maintain rising. The corporate now expects income to develop 10 % this yr, up from an 8 % expectation final quarter, and for-profit to realize 8 %, the identical because it anticipated earlier than.

Notably, PepsiCo’s second-quarter income and revenue, which each beat analyst expectations, grew sooner than gross sales volumes, implying that the corporate was in a position to cost extra for every can of soda and bag of potato chips.

Can it maintain that up for the remainder of the yr? “We nonetheless have six months to go,” Mr. Johnston stated, and there are “loads of unknowns by way of what’s going to occur with shopper conduct.”

PepsiCo is likely one of the first huge firms to report earnings for the second quarter of the yr, and the tone it has set is of cautious optimism. Analysts and traders are watching bellwether firms like PepsiCo for indicators concerning the state of shopper spending and the chance of a recession, because the financial system seems more and more fragile.

PepsiCo’s inventory completed decrease on Tuesday. Because the begin of the yr, it has handily beat the market, with firm shares down about 2 %, in contrast with the S&P 500, which is down about 20 % over that point.

PepsiCo’s report suggests that buyers are nonetheless in a position to take up some value will increase, which don’t look like abating. Additional out, nonetheless, the corporate seems extra cautious about how potential shopper cutbacks and its personal rising prices might eat into revenue margins. Forecasts for the quarters to come back shall be intently scrutinized in different earnings experiences due within the coming weeks, as market watchers attempt to get a really feel for a way the financial system would possibly form up in the remainder of the yr.

“As inflation retains going up,” Ramon L. Laguarta, PepsiCo’s chief govt, stated on the decision, “we’re going to must be superagile and really exact on the alternatives we make with the buyer.”