Why it matters
- PepsiCo now expects 2026 core earnings per share to grow 2.5% to 3.5%, down from the low end of a 5% to 7% range it gave earlier, the company said on Oct. 8.
- Third-quarter net revenue rose 5.6% to $25.27 billion and organic revenue rose 3.1%, but core EPS rose only 2% to $2.34 as core operating margin narrowed.
- The company said it will make more structural cost cuts in the coming months to fund investment in North America and offset rising input costs. Its shares swung in premarket trading.
PepsiCo cut its 2026 profit forecast on Thursday, Oct. 8, saying it now expects core earnings per share to grow 2.5% to 3.5% this year, down from the low end of a 5% to 7% range. Third-quarter net revenue rose 5.6% to $25.27 billion, the company said in its earnings release.
The company also lowered its core constant-currency EPS growth outlook to 1% to 2%, from the low end of 4% to 6%. It raised its net revenue growth forecast to about 6%, from 4% to 6%.
What did PepsiCo report for the third quarter?
Earnings per share rose 17% to $2.23 for the 12 weeks ended Sept. 5. Core EPS, which excludes items such as restructuring and mark-to-market effects, rose 2% to $2.34 from $2.29, according to the release.
| Q3 2026 (12 weeks ended Sept. 5) | This year | Year earlier | Change |
|---|---|---|---|
| Net revenue | $25.27 billion | $23.94 billion | +5.6% |
| Organic revenue | — | — | +3.1% |
| Operating profit | $4.26 billion | $3.57 billion | +19% |
| Core operating margin | 16.9% | 17.3% | −35 bps |
| EPS | $2.23 | $1.90 | +17% |
| Core EPS | $2.34 | $2.29 | +2% |
Source: PepsiCo earnings release.
Net revenue growth included a 1.7-percentage-point net benefit from acquisitions and divestitures and a 0.7-point boost from currency translation. Core operating profit rose 3%, helped by a 4-percentage-point favorable impact from tariff refunds, the company said. Higher operating costs and more spending on advertising and marketing offset part of the gain.
Why did PepsiCo lower its outlook?
PepsiCo did not tie the guidance cut to a single cause in the release. Chief Executive Ramon Laguarta said the company is "acting with urgency to sustainably improve our performance in North America" through more spending on innovation, brand building and execution.
"Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation," Laguarta said.
North America remained the weak spot. Reported operating profit at PepsiCo Foods North America fell 13% in the quarter. The company said North American convenient foods revenue trends improved from the prior quarter on savory snack volume growth, but lower effective net pricing offset that. The North American beverages business grew net revenue 5%, mainly because of acquisitions made in 2025. Every international segment posted strong revenue growth, the company said.
How did PepsiCo stock react?
PepsiCo (PEP) shares were at about $124.50 at 8:53 a.m. Eastern time, up about 0.6% from Wednesday's close of $123.73, according to Yahoo Finance data. Premarket trading has been volatile, with prices ranging from about $122.40 to $127.00 since 4 a.m. Premarket volume is thin and prices can swing.
PepsiCo kept its plan to return $8.9 billion to shareholders this year, made up of $7.9 billion in dividends and $1.0 billion in share buybacks. Executives were scheduled to take analysts' questions at 8:15 a.m. Eastern time.
Consumer companies have been reporting a mix of pressures this week. Constellation Brands slipped after its own results, and Levi Strauss raised its outlook on tariff refunds. Follow more earnings in our companies section and the latest moves in markets.
