PepsiCo (NYSE:PEP) owns a collection of wonderful and highly respected consumer brands. And if the second quarter is any indication, the company is doing pretty well right now. But there's one trend that's become increasingly concerning to me-debt.
A good quarter
If you look at the top line alone, Pepsi had a tough second quarter. Sales were down a little over 3%. However, if you take out things like the impact of currency changes, organic revenue growth was actually up 3% or so. In fact, the company increased its full-year earnings guidance. The foundation for that was an increase in operating margins driven by productivity gains and, "revenue management strategies." So, basically, the company has been doing pretty well in world that's working through a slow patch.
On one level, this is pretty good news. Indeed, there's a lot to like about PepsiCo. But there's an underlying trend that has me worried: debt.
