PepsiCo’s quarterly results show that North American consumers continue to face pressure as they prioritize essentials and plan for higher gas prices.
The soda and snack giant exceeded Wall Street’s expectations on both revenue and profit, but its North American performance dragged down the quarter. Moreover, Americans did not increase their snack purchases despite approximately 15% price cuts in February on Lay’s, Doritos, Cheetos, and Tostitos.
PepsiCo’s Q2 and Year-to-Date highlights included:
• Net revenue increased 6.4% and 7.3%, respectively
• Organic revenue2 increased 2.4% and 2.5%, respectively
• Earnings per share (EPS) increased 137% and 72%, respectively
• Core2 EPS increased 4% and 6%, respectively
• Core constant currency2 EPS increased 1% and 3%, respectively
Both revenue growth and pricing for PepsiCo’s snack brands in North America decreased by 2% this quarter, while volume growth stayed flat in the region.
CEO Ramon Laguarta told investors, “Our second quarter results featured strong organic volume and net revenue growth for the global convenient foods and global beverages businesses. Year-to-date, PepsiCo’s global organic volume has increased at the highest rate since 2022 – aided by the strength of the international business and the continued evolution of the portfolio to offer more choices through portion control varieties, diverse ingredients, functional benefits such as hydration, protein and fiber, energy and zero sugar beverage varieties.”
“Looking ahead, we will continue to execute on our strategic priorities with a focus on accelerating top line growth – including the restaging of certain global brands, innovating with emerging, functional and permissible offerings and investing in certain affordability initiatives. We are also elevating productivity across the organization to improve operating leverage.”
Moving forward, for 2026, the company continues to expect:
• Organic revenue to increase between 2 and 4 percent;
• Core constant currency EPS to increase between 4 and 6 percent;
• A core annual effective tax rate of approximately 22 percent;
• Capital spending to be below 5 percent of net revenue;
• A free cash flow conversion ratio of at least 80 percent; and
• Total cash returns to shareholders of approximately $8.9 billion, comprised of dividends of $7.9 billion and share repurchases of $1.0 billion.
PepsiCo’s stock fell 3% following the announcement.
By CEO NA Editorial Staff
