Recession-resilient stocks might be the talk of the town amid the drumbeat of an economic downturn; but for one CFO, the answer might be in the snacks. "One of the reasons defensive stocks truly do well in these types of environments is because consumers still want to have these small, simple, affordable treats and luxuries in their lives", says PepsiCo CFO Hugh Johnston. He told Yahoo Finance Live he's "not that surprised" consumers aren't trading down on more products.
PepsiCo (PEP) reported first quarter earnings before the bell, showing net sales climbed 10.2%, despite overall prices rising 16%. Competitor Coca-Cola (KO) also saw strong demand for its product, fueled by its own price hikes. "You may not be able to go out and get a new car. You may not be able to go out and get a really fancy piece of technology, but you can afford a bag of Doritos or you can afford a Gatorade Zero after you work out," he explains.
You can watch Julie Hyman, Brad Smith and Brian Sozzi's full interview with Hugh Johnston here.
Key Video Moments:
00:00:16 - Johnston "not that surprised" about consumers
00:00:38 - Consumers can afford a bag of Doritos
