PepsiCo on Thursday reported quarterly profits and revenue that beat analysts’ expectations, fueled by international growth while its North American operations continue to lag.
With just one quarter left in 2026, the company also lowered its full-year profit forecast as challenges in its home market weigh on earnings. Pepsi expects core earnings per share to rise 2.5% to 3.5%, down from its previous projection of the low end of a 5% to 7% range. It also now expects net revenue growth of approximately 6%, at the high end of its prior outlook of a 4% to 6% range.
Tune in at 10 a.m. ET as PepsiCo CEO Ramon Laguarta joins CNBC TV to discuss the company’s earnings. Watch in real time on CNBC+ or the CNBC Pro stream.
Shares of Pepsi fell less than 1% in premarket trading.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.34 adjusted vs. $2.29 expected
- Income: $25.27 billion versus $24.96 billion expected
Pepsi reported third-quarter net income attributable to the company of $3.05 billion, or $2.23 per share, down from $2.6 billion, or $1.90 per share, a year earlier.
Excluding items, the company earned $2.34 per share.
Net sales rose 5.6% to $25.27 billion. Organic revenue, which excludes acquisitions, divestitures and foreign exchange, increased 3.1% in the quarter.
Pepsi reported volume growth of 3% for its beverages and 1% for its food products for the quarter. Volume excludes price and currency fluctuations to more accurately reflect demand.
The company’s international markets were once again the bright spot. Pepsi’s international operations have accounted for 41% of the company’s net revenue so far this year, CEO Ramon Laguarta said in prepared remarks.
Pepsi reported volume growth in all but one of its international business units during the quarter. Only its convenient food division in Europe, the Middle East and Africa recorded a 1% volume decline.
But in its domestic market, Pepsi once again struggled.
“Our North America operations performed below our expectations and represent an opportunity for significant improvement,” Laguarta said.
Its North American beverage unit saw volume decline 2%, while its North American food division saw volume flat.
The turnaround of its domestic business is progressing more slowly than expected, Chief Financial Officer Steve Schmitt said in prepared remarks. So far, the strategy to address struggling divisions has focused on innovation and the company’s advertising and marketing.
For its snacks, Pepsi relied on simpler ingredients, “alternative” oils and functional benefits, such as protein and fiber. Its beverage business will continue to focus on functional hydration, flavored soft drinks, energy drinks and sugar-free options.
However, Laguarta shared green signs that the company’s efforts are paying off.
Pepsi’s North American convenience food business, which includes brands like Doritos and Quaker Oats, saw organic revenue increase sequentially. Its North American beverage unit, which includes its namesake sodas and Gatorade, among other brands, has seen the organic volume trend accelerate, driven by its functional hydration and sugar-free beverages. But Pepsi’s soft drinks portfolio lagged behind the entire category, including its rival Coca-Cola.
Pepsi plans cost cuts to reduce layoffs and discretionary spending to fund investments in innovation and marketing, Laguarta said in prepared remarks.
Gn bussni
